Court Opinion

ID: 5248450
Source: CourtListenerOpinion
Date Created: 2022-01-06 18:06:19.46925+00
Date Added: 2024-06-11T08:27:54.190071
License: Public Domain

Page, J. (dissenting):
In my opinion the transfer of the shares of stock in the National City Bank by the death of Sheffield Phelps is subject to taxation under the laws of this State. It was entirely competent for the hens and next of kin of William Walter Phelps to agree among themselves as to the distribution of the estate without administration. When they paid the debts and legacies, and created the trusts provided for by the will, and designated the same persons that were nominated in the will to execute the trusts, there was no one who could complain. The real and personal estate vested in them at the death of the testator. In the absence of a statute requiring the estate to be administered under judicial supervision, and it is not claimed that there is such a statute in New Jersey, a resort to the courts was not necessary. In such a case there are no executors of the will; for while the testator may nominate, the court alone can appoint, an executor. An executor is not vested with any title or power until he becomes so vested by letters testamentary. The effect of the agreement made by the heirs and next of kin was that the estate which had vested in them at the death of the testator should be held in common and not presently distributed, and certain persons were appointed as their agents to manage the property for them That the persons employed as agents were the same as those who had been nominated by the testator makes .no difference; they are not thereby vested with the powers that attach to the office of executor. We are not concerned with the trusts created by the will, but solely with the rights of the residuary legatees, and, therefore, it is not neces*90sary on this appeal to consider the bearing of questions that might arise in that behalf. I have assumed that letters testamentary were not issued to the executors, as there is no allegation in the record that such letters were issued. If as a matter of fact letters were duly issued, when the executors and trustees sold the securities or property of the residuary estate and reinvested it under the power vested in them by the agreement, they held the securities in which the investment was made, not in their capacity as executors or trustees of the estate, but as the agents of the residuary legatees.
The stock of the National City Bank, which is the subject of this proceeding, was so purchased; and hence, although held in the names of the persons named as the executors and trustees of the estate, it was not in fact held by them as such executors and trustees. The money which was realized by the sale of the property of the estate, if paid over to the residuary legatees, would not have been taxable in this State. The reinvestment of this money by or on behalf of the residuary legatees does not reincorporate the stock into the estate of William Walter Phelps. Therefore, the transfer of this stock to the estate of Sheffield Phelps is not taxable as the transfer of an asset of the estate of his father.
In my opinion, at the time of Sheffield Phelps's death, his proportionate share of the National City Bank stock was held for him by his agents. Although, to make adjustment of the agency dealings and a proper distribution of the property held by the agents among the copartners, an accounting might be necessary, this did not make Sheffield Phelps’s right to the property a mere chose in action. (Matter of Houdayer, 150 N. Y. 37; Matter of Newcomb, 71 App. Div. 606, 608; affd., on opinion below, 172 N. Y. 608.) Property held by an agent is the property of the principal, and possession of the agent is the possession of the principal. Therefore, these shares of stock are to be treated in this proceeding as though the stock stood in the name of Sheffield Phelps, and is taxable. (Matter of Newcomb, swpra.)
The order of the surrogate should, therefore, be reversed, with costs, and the matter remitted to the Surrogate’s Court to be sent to an appraiser.
Order affirmed, with ten dollars costs and disbursements.