Case Name: MATTER OF WOLFE
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1892-11
Citations: 29 Abb. N. Cas. 340
Docket Number: 
Parties: MATTER OF WOLFE.
Judges: 
Reporter: Abbott's New Cases
Volume: 29
Pages: 340–360

Head Matter:
MATTER OF WOLFE.
N. Y. Supreme Court, General Term, First Department ;
November, 1892.
1. Taxes; collateral inheritance tax.] The question what was exempt from collateral inheritance tax could not be determined by the surrogate on proceedings for appraisal and assessment, under section 13 of the Collateral Inheritance Tax Act (L. 1885, c. 483).
2. The samel] It seems that the State is not an interested party, within the meaning of section 13 of said Act, to whom notice should be given of the assessment of the tax by the surrogate and that the surrogate may assess the tax without giving notice to- the comptroller, district attorney, or any other State official.
3. The same.] The provision in section 15 of said act—that the surrogate’s court . . . shall have jurisdiction to hear and determine all questions in relation to the tax arising under the provisions of said act—did not give the surrogate the right, in anyway that he may see fit, to determine all questions in relation to the tax, but simply that, in thé manner prescribed by the act, he should have authority to determine all questions relative to the tax.
4. The samel] It seems that under the act of 1885, a question of exemption could only be determined in a proceeding under sections 16 and 17 to compel payment instituted by the district attorney.
5. The samel] The surrogate having no jurisdiction in assessment proceedings instituted under section 13 of the act of 1885, to determine what is exempt from the tax, a decree made in such proceedings, holding a bequeath to be exempt, will not bar proceedings by the district attorney, to compel the payment of the tax upon such bequests irrespective of whether sufficient notice of the assessment proceedings had been given to the comptroller of New York City, to put the State in default for not appearing therein.
6. The same ; institutions exemptl] Testator died in 1887, while the ■ collateral inheritance tax law of 1885 (L. 1885, c. 483) was in force ; in February, 1892, a decree was entered in proceedings instituted by the district attorney, taxing bequests to Grace Church and the Metropolitan Museum of Art.—Held, on appeal by the legatees from the surrogate's decree, that the assessment having been completed prior to the enactment of subsequent legislation, exempting from taxation bequests to institutions of the character to which the bequests, had been made, such legislation did not relieve appellants from the payment of the tax in question.
7. Executor ; collateral inheritance tax.] In proceedings instituted by executors under L. 1885, c. 483, § 13, for the assessment of the collateral inheritance tax, the surrogate made a decree determining certain bequests to be exempt from the tax; and the executors, relying upon such decree, paid over in full the bequests so declared to be exempt.—Held, that the surrogate, having no jurisdiction in the assessment proceedings to determine the question of exemption, the decree therein was no protection to the executors, in proceedings instituted by the district attorney, to compel the executors to pay the tax on the bequests which had been decreed exempt. So held, without deciding the question whether the State, through the comptroller of N. Y. City, had sufficient notice of the hearing before the surrogate in which the decree was made.
Appeal by legatees from a decree of the N. Y. Surrogate’s Court, confirming an assessment of the collateral inheritance tax, assessed in proceedings instituted by the district attorney, and from certain other orders made in said proceedings.
The decree of the surrogate appealed from imposed a tax upon bequests contained in the will of Catharine L. Wolfe to Grace Church of New York City and the Metropolitan Museum of Art.
The further facts are fully stated in the opinion.
S. P. Nash (S. P. & McL. Nash, attorneys), for appellant, Grace Church.
I. The surrogate, being the assessing or taxing officer, the State was bound by his decision whether or not the comptroller had notice of the proceedings (citing Vanderpoel v. Van Valkenburgh, 2 Seld. 190; Bogardus v. Clark, 4 Paige, 623 ; Scott v. Sherman, 2 W. Black. 977 ; Gelston v. Hoyt, 13 John. 561 ; aff’d in 3 Wheat. 246).
II. The comptroller had sufficient notice (citing Matter of the Mayor, etc. of N. Y. City, 99 N. Y. 569; Matter of the Empire City Bank, 18 Id. 199).
III. If the first proceeding was void, then a reassessment was necessary, and L. 1890, c. 553, had come into operation.
IV. The amendments to the Collateral Inheritance Act of 1892 should have led to the dismissal of the proceeding.
Evarts, Choate & Beaman, for appellant, the Metropolitan Museum of Art.
Benj. F. Dos Passos (DeLancey Nicoll, district attorney), for respondent.
I. The liability of appellants to taxation upon the legacies passing to them under decedent’s will must be determined by L. 1885, c. 483, in force at her death, as L. 1890, c. 553, and L. 1892, chapters 169, 399, are not in any sense retroactive (citing Matter of Miller, 110 N. Y. 216; Sherrill v. Christ Church of Poughkeepsie, 121 Id. 701; Ely v. Holton, 15 Id. 595 ; Matter of Stewart, 131 Id. 274 ; Matter of Kemeys, 56 Hun, 117; Matter of Minturn, 15 N. Y. Supp. 547, n.; s. c., N. Y. Law Journal, July 18, 1890; Pierson v. People, 79 N. Y. 424).
II. The orders of August 27 and October 29, made in the executor’s proceeding, are not binding upon the comptroller, as he was not, by due and proper notice, made a party to such proceeding, or afforded any hearing upon the appraisement (citing L. 1885, c. 483, § 13; Matter of McPherson, 104 N. Y. 306 ; Stuart v. Palmer, 74 Id. 183 ; Matter of Vanderbilt, 10 N. Y. Supp. 239; Matter of Astor, 6 Dem. 402 ; Coxe’s Appeal, 1 Purd. Dig. 10th ed. 218,n.; Code Civ. Pro. § 553; Hood v. Hood, 85 N. Y. 561; Voight v. Shenk, 7 N. Y. Supp. 864; Bank of Poughkeepsie v. Hasbrouck, 6 N. Y. 220).
III. The orders made in the executor’s proceeding were not former adjudications against the district attorney or State (citing Abbott's Trial Brief, 828; Campbell v. Butts, 3 N. Y. 173; Matter of Arnett, 49 Hun, 599; Matter of Farley, 15 State Rep. 727; Case v. Reeve, 14 Johns. 79; Matter of McPherson, 104 N. Y. 306 ; Andover & Medford Turnpike Corp. v. Gould, 6 Mass. 39; U. S. v. Morris Co., 27 Fed. Rep. 340; U. S. v. Trucks, 27 Id. 541; Anderson v. Anderson, 112 N. Y. 104; Matter of N. Y., Lake Erie & Western R. R. Co., 110 Id. 374 ; Matter of Hall, 27 State Rep. 133 ; Matter of Howard, 54 Hun, 305 ; Dear v. Red, 37 Hun, 594; 6 Waits’ Act. & Def. 787 ; Perry v. Dickerson, 85 N. Y. 345 ; Stannard v. Hubbell, 123 Id. 520; Dawley v. Brown, 79 Id. 390; Bell v. Merrifield, 109 Id. 202 ; Stinger v. Commonwealth, 26 Pa. St. 422 ; Stade v. Commonwealth, 52 Id. 181; Tyson v. State, 28 Md. 577 ; Matter of Astor, 6 Dem. 402 ; Frazer v. People, Id. 174).
IV. Appellants, Grace Church and the Museum of Art, are not exempted by any statute (citing Catlin v. Trinity College, 113 N. Y. 133; Matter of Vasser, 127 Id. 1; People ex rel. Savings Bank of New London v. Coleman (Ct. of App.) N. Y. Law Jour. Nov. 2, 1892 ; Matter of Vanderbilt, 10 N. Y. Supp. 239 ; Matter of Lenox, 9 Id. 895).
The amendment by'laws of 1892, chapter 399, relating to taxable transfers of property (remodeling the former statutes relating to the collateral inheritance tax) provides (by §11) that the surrogate shall appoint an appraiser “upon the application of any interested party, including county treasurers or the comptroller of New York City, or upon his own motion;’’ by section 12, the appraiser is required to give notice by mail of the timé and place of appraisement, “ to all persons known to have a claim or interest in the property to be appraised, including the county treasurer or comptroller, and to such, persons as the surrogate may by order direct;’’ and by section 13, “ The surrogate shall immediately give notice, upon the determination by him as to the value of any estate which is taxable under this act, and of the tax to which it is liable, to all parties known to-be interested therein.’’
The amendment by the laws of 1892, chapter 399, § 10, provides that “ the surrogate’s court of every county of the State having jurisdiction to grant letters testamentary or of administration upon the estate of a decedent whose property is chargable with tax under this act, or to appoint a trustee of such estate, or any part thereof, or to give ancillary letters therpon, shall have jurisdiction to hear and determine all questions arising under the provisions of this act, and to do any act in relation thereto, authorized by law to be done by a surrogate m other matters or proceedings coming within his jurisdiction,”
Prior to the assessment of the tax in this case, but subsequent to the death of the testator, it was enacted, by L. 1890, c. 553, that religious, educational, bible, missionary, tract, literary, scientific, benevolent, or charitable corporation, or corporation organized for the enforcement of laws relating to children, or animals, or for hospital, infirmary, or other than business purposes, should be exempt from L. 1885, c. 483, provided they were not a money or stock corporation deriving an income or profit from the capital, etc.
Subsequent to the assessment in this case, it was enacted, by L. 1892, c. 169, “ that any property heretofore devised or bequeathed or which may hereafter be devised or bequeathed to any person who is a bishop, or to any religious corporation, shall be exempted from, and not subject to, the provisions of this act.” L. 1892, c. 399, remodeling the former collateral tax acts, in 'section 2, contains substantially a similar exemption.
The • question whether on the death of the testator, and before any proceedings taken, a right has vested in the State, in such sense as to allow proceedings thereafter to be commenced, notwithstanding a repeal of the clauses allowing such proceedings, is now before the court of appeals in the Matter of Prime, which involves also the question whether benevolent, etc., societies created by the law of sister States are excluded from claiming exemption,
See note at the end of this case.

Opinion:
Van Brunt, P. J.
On April 4, 1887, one Catharine L. Wolfe, died in the City of New York, leaving a last will and testament, which was duly admitted to probate, -and letters testamentary issued thereon on May 31 of that year. By this will certain legacies were left to appellants. On June 20, 1887, the executors of said Wolfe petitioned •the surrogate for the appointment of an appraiser, in •order that the amoumt of the tax upon the various "legacies of the decedent might be ascertained and declared -.so far as said petitioners were bound to pay the same. Of this application neither the comptroller nor the district •attorney had any notice. On June 23, 1887, said executors filed a supplemental petition, stating that the .said order of June did not prescribe the notice to be given of such appointment to the parties interested, and praying that an order be made fixing a reasonable time for such notice to parties interested. Thereupon, on the following •day, an order was made prescribing notice to several persons, not including the comptroller or district attorney. Thereafter the appraiser appointed by the surrogate proceeded to appraise the property of the decedent, subject to the tax imposed by chapter 483 of the Laws of 1885, and in August, 1887, made and filed his report, in which the .sole reference to the two gifts or legacies above set forth, is as follows :
" Amount to be paid to institutions which are free of tax, viz.: Metropolitan Museum of Art, 6th section, $200,000; Rector, Wardens, etc., Grace Church, codicil, $350,000."
On August 27, 1887, an order was made by the surrogate confirming said report in all things and assessing the taxes upon various legacies and gifts given by said decedent under her said will, under the provisions of said act. And it was further ordered that nothing therein contained should be construed as an adjudication as to the liability to taxation of property of said estate, whether thereinbefore mentioned or not, except so far as the same was thereinbefore assessed for such taxation, and that all questions as to the liability to taxation and the value for' that purpose of property not therein assessed were reserved for further consideration upon September 15, 1887, at eleven o'clock in the forenoon, which time and place were-thereby assigned fora hearing upon the following question, viz.: Why the property disposed of in the 5th, 6th, 12th, 17th and 18th clauses of the will of said Catharine Lorillard Wolfe, and in the codicil to said will, should not be valued and assessed under said act; these clauses including the provisions contained in the will and codicil for the appellants. On September 3, 1887, a copy of the appraiser's report and of said order of August 27 was-mailed by the attorneys for the executors to various persons, including the comptroller of the City of New York, and on September 6 a copy of said order of August 27 was-served upon the comptroller by an assistant of the surrogate, and on October 29, 1887, the surrogate made an order reciting the previous order of August 27, and the-hearing upon the questions reserved thereunder on September 15, and thereby adjudged among other things, that the legacies to the Metropolitan Museum of Art, and the legacy to Grace Church, were each of them exempt from taxation under said act. No copy of this order was served upon the comptroller or the district attorney. After the making and entry of said order or decree of the surrogate, dated October 29, 1887, the executors of said decedent, relying upon said decree, and in good faith, paid and delivered to the appellants said gifts and legacies given to them under said will and codicil. On March 19, 1889, the court of appeals decided that a religious society like Grace Church was not exempt from the tax in question. In June, 1890, by chap. 553 of the Laws of 1890, an act was passed exempting religious, educational and other societies from the provisions of the Collateral Inheritance Tax acts. Subsequently, in June, 1890, the court of appeals decided that, as there was no legislative-intention shown in the act of 1890, above referred to, that it should have a retroactive effect, its operation was only-prospective. On October 15, 1890, the petition herein was filed by the district attorney, who states that he has. been notified in writing of the refusal or neglect of the executors to pay the tax as above mentioned.
The answer of the appellants pleaded the decision of the surrogate upon the final order entered upon October 29, 1887, that more than two years had elapsed since said legacy had been paid, and that the jurisdiction of the-surrogate in respect to the same had ceased, and claimed exemption under the law of 1890 above referred to. The-matter was referred by the surrogate to a referee, who reported the facts. Exceptions were filed to the referee's-report, which were overruled by the surrogate, who adopted the conclusion of the referee that the appellants were liable to the tax.
An amendment to the act of 1885 was passed on March. 19, 1892, which, after amending section 1 of the original act, also added to that section the following words:. " Provided further that any property heretofore devised or bequeathed, or which may hereafter be devised or bequeathed to any person who is a bishop, <5r to any religious, corporation, shall be exempted from, and not subject to, the provisions of this act." On April 30, 1892, chapter 399, the act of 1885 was remodeled, section 2 of the last mentioned act containing a similar exemption of any property heretofore or hereafter devised or bequeathed to any person who is a bishop, or to any religious corporation. By the 25th section of said last mentioned act, it is provided that the provisions of this act, so far as they are substantially the same as those of laws existing on April 30, 1892, shall be construed as a continuation of such laws, modified or amended according to the language employed in this act,. .and not as new enactments. A petition was filed upon the part of the appellants for leave to set up this legislation as a further answer to the proceedings, which application was denied, the surrogate holding that the provisions of the act of 1892 did not exempt the appellants from liability to the tax. Orders were thereupon entered in conformity to the decision, and the appeals now before the court were taken therefrom.
There are two questions involved in the consideration of these appeals. The first is whether the proceedings before the surrogate, by which he decided that the appellants were not liable to the tax, made the question res adjudicata. The discussion of counsel in respect to this point was largely addressed to the question as to whether the comptroller was bound by the decision of the surrogate without having received notice. It seems to us that in respect of notice, by section 13 of chapter 483 of the Laws of 1885, it is entirely discretionary with the surrogate as to what notice shall be given and to whom; and that such proceedings maybe initiated either upon the application of .any interested party, or upon the surrogate's own motion. The section provides for the appointment of an appraiser upon the application of any interested party, or upon the motion of the surrogate, whenever occasion shall require, whose duty it shall be forthwith to give such notice by mail, to such persons as the surrogate may by order direct, of the time and place he will appraise such property, and at such time and place the appraiser shall appraise the same and make a report, and upon the receipt of the report, the surrogate shall forthwith assess and fix the then cash value, and shall immediately give notice thereof by mail to .all parties known to be interested therein, and that any person or persons dissatisfied with said appraisal or assessment, may appeal therefrom to the surrogate of the proper county, within sixty days after the making and filing of such assessment. It is clear that in all these proceedings there is no obligation to give notice- to any person until after the surrogate has made the assessment, and then notice by mail shall be given to all parties interested therein. And it would seem that it was this portion of the act, which it was attempted to comply with, by serving the order which the surrogate made upon the coming in of the appraiser's report, in this case upon the comptroller. The comptroller was not a person interested in the estate. His interests were not to be affected by any action which the surrogate might take. It was a question as to the right of the State ; and the legislature could provide that the surrogate should go on and assess this tax without any notice to any State official. And that is what the legislature seems to have done, and therefore if the surrogate had jurisdiction to determine in the proceeding mentioned, the question of exemption, the determination mentioned was binding.
But, upon an examination of the act, we fail to find any authority upon the part of the surrogate to determine the question that a party is not liable to taxation, except, perhaps, in a proceeding initiated by the district attorney. The surrogate has the power, upon the application of an interested party, or upon his own motion, to appoint an appraiser for the purpose of assessing the tax. But nothing is said in respect to any power upon the part of the surrogate to adjudicate as to what is liable to tax and what is exempt. It may be claimed that the power to assess implies the power to declare the property exempt, especially .in view of the provisions of section 15 of the act of 1885, which provides that "the surrogate's court in the county of which the decedent was a resident at the time of his death, shall have jurisdiction to hear and determine all questions in relation to the tax arising under the provisions of said act." But this provision evidently was not intended to give the surrogate the right, in any way that he might see fit, to determine all questions in relation to the tax, but simply that, in the manner prescribed by the act, he should have authority to determine all questions relative to the tax. The •scheme of the act preceding this general grant of power related only to appraisement of property, and did not furnish any machinery for determining the question of exemption.
By the 16th and 17th sections, however, a method is provided for the determination of this question. Section 17 provides that whenever the treasurer or comptroller of any county shall have reason to believe that any tax is due, and unpaid under this act, after the refusal or neglect of the persons interested in the property liable to said tax to pay the same, he shall notify the district attorney of the proper county in writing of such failure to pay such tax, and the district attorney so notified if he have probable cause to believe a tax is due and unpaid shall prosecute the proceeding in the surrogate's court in the proper county as provided in section 16 for the enforcement and collection of such tax. And section 16 declares, that if it shall appear to the surrogate's court, that any tax accruing under this act has not been paid according to law, it shall issue a citation citing the persons interested in the property liable to the tax, to appear before the court, on a day certain not more than three months after the date of such citation, and show cause why such tax should not be paid. In this proceeding the question of exemption or non-exemption can be determined. But until such proceeding is taken, the act does not seem to provide any manner in which the issue of exemption from taxation can be presented for adjudication.
It may be said that this imposing the burden upon executors of being called upon to pay legacies, and upon estates of being liable to additional interest, because of noncompliance with the law, although they are absolutely unable to compel a determination of their liability to pay, which is unreasonable. But this branch of the legislation is no more incongruous, remarkable and unreasonable than many other provisions of the acts relative to collateral inheritance tax ; they becoming more remarkable the more the question is legislated upon. As for example, in the , act of 1892, it is provided that any property heretofore or hereafter devised or beqüeathed to any person who is a bishop, or to any religious society, shall be exempt, whereas a legacy to a child of the testator is made the subject of a tax, it seeming to have been the opinion of the legislature that a bishop or religious corporation has greater •claims upon testators than their own children—a piece of legislation the parallel of which it would be difficult to find .among legislative enactments.
If the surrogate had no jurisdiction to pass upon the question of exemption, then it is clear that his adjudication was no protection to the parties acting thereunder.
The next question presented is: Has the subsequent legislation relieved the appellants from the payment of the tax in question ? The learned surrogate was of the •opinion that it had not, and attention is called to the decision of our court of last resort in the Matter of Miller (110 N. Y. 216). In that case the surrogate says: " The testatrix died in September, 1886. On March 24, 1887, an order was entered confirming the appraisement and .assessing the tax. The tax was not paid. In August, 1887, the legatee asked that the order be vacated, on the .ground that he was an adopted child and that by the act passed June 25, 1887, he was exempt. He contended that the act of 1887 not only made any proceeding for its •collection impossible, but that it related back to the passage of the act of 1885, and, in effect, nullified the proceeding which led to the order, and annulled the order itself." The court said in the case cited : " This construction would render void not only the order in question, which was valid when made, but all other similar proceedings, although regular when taken, and would, as said in Ely v. Holton (15 N. Y. 595), lead to the grossest absurdities."
No legislative intention to that effect is discoverable in the act of 1887. The order was complete and perfect the moment it was made, subject to modification or reversal on appeal, but every st&p had been taken which depended for its force upon the original act. So far as the order is concerned, and the rights and the liabilities of the parties thereunder, it was a transaction complete and closed before the passage of the amendatory act, and being-in that condition we properly apply the words quoted in Butler v. Palmer (1 Hill, 324, 355). " The law itself may be disannulled by the author, but the right acquired by virtue of that law, whilst in force, must still remain." The surrogate then continues : " While it is not necessary to determine at this time the effect of this amendment, so far as it concerns the estates of decedents dying prior to its-passage, wherein proceedings for the assessment of the tax have not been instituted or completed, it is difficult to see how, in view of the decision in the Matter of Miller, the court can hold otherwise than that the act has only a prospective effect."
And this view of the learned surrogate, it seems to us,, must prevail.
In the case of Key v. Goodwin (4 Moore & Payn, 341) Lord Chief Justice TlNDAL laid down the rule as follows : " The effect of the repeal of a statute is to obliterate it (the statute repealed) as completely from the record of the parliament as if it had never passed, and it must be considered as a law that never existed, except for the purpose of these'actions or suits which were commenced, persecuted and completed while it was an existing law."
Applying these principles to the case at bar, it would seem that the assessment in question having been entirely completed so far as the surrogate was concerned prior to the enactment of the exemption clauses, the appellants, cannot gain any benefit therefrom.
It would seem, therefore, that the decree of the surrogate should be affirmed, with costs.
O'Brien, J., concurs.
Catlin v. Trinity Church, 113 N. Y. 133.
Sherrill v. Christ Church of Poughkeepsie, 121 N. Y. 701 ; S. C., 31 State Rep. 896.