In re the Appraisal of the Property of Fitch

Patterson, J.:

Mrs. Emily M. Fitch, a resident of Connecticut, died in that State-in July, 1894, leaving a last will and testament in and by which she-appointed John B. Fitch executor. The will was duly admitted to-probate in Connecticut, and before October, 1895, the estate had, been fully administered there, the executor’s accounts had been passed and allowed by the Probate Court of that State, and the collateral inheritance tax imposed by its laws had been paid. Among the assets of the estate were certain shares of the capital stock of the. Consolidated Gas Company, a corporation of the State of Hew York,. The certificates representing these shares had been kept by the testatrix in Connecticut, were received there by the executor, retained by him, accounted for in the Probate Court there, and disposed of' in accordance with the directions of the will. In April, 1897, on the petition of the comptroller of the city of Hew York, a proceeding was instituted in the Surrogate’s Court in the county of Hew York for the appointment of an appraiser to fix and determine the value for assessment, for the purpose of taxation under the Transfer Tax Law of the State of Hew York, of the personal property situated in the State of Hew York of which the testatrix died possessed,, and which passed or was transferred by the terms of her will. That, personal property consisted of the gas company’s shares above mentioned. An order was made by the Surrogate’s Court appointing an appraiser, and subsequently the executor moved to vacate it. That-motion was denied, and this appeal is by the executor from the-order entered upon such denial.

The ground upon which it was sought to vacate the order appointing the appraiser is substantially that, in view of the situation of Mrs. Fitch’s estate and the full administration and settlement of that estate in Connecticut, and upon a proper construction of the statutes of this State relating to the subject, the Surrogate’s Court had no jurisdiction to make the. order. When the comptroller’s ■ petition was presented to the surrogate, the subject-matter upon which he was required to act was in the following situation: The decedent was a non-resident of the State of Hew York. The shares of stock in the gas company were personal property within the State of Hew York, subject to taxation under the Transfer Tax Law. (Matter of Bronson, 150 N. Y. 1.) Being property of a non-resident decedent, the tax was one upon property, and not upon the right of succession as it is in the case of a resident decedent. (Matter of Embury, 19 App. Div. 218.) A tax became due and payable to the State of Hew York at the time of the transfer of the shares, and was a lien upon the property transferred until paid. (The Transfer Tax Law, Laws of 1892, chap. 399, § 3.) The transfer was made by the will of Mrs. Fitch, and it became the duty of the executor of that will (there being a statute providing for the imposition of the tax) to request that imposition to be made. (Matter of Embury, supra.) The estate was fully administered and settled in Connecticut. The only inquiry then is as to the jurisdiction of the surrogate to make the order under such circumstances. The appellant claims that the Surrogate’s Court was without jurisdiction, because of the complete administration of the estate in Connecticut and of the absence of legislation furnishing the means of imposing a tax or collecting it.

It is provided by section 10 of the Transfer Tax Law 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 chargeable with any tax under the act, or to appoint a trustee of such estate or any part thereof, or to give ancillary letters thereon, shall have jurisdiction to hear and determine all questions arising under the provisions of the law and to do any act in relation thereto authorized by law to be done by a surrogate in other matters or proceedings coming within his jurisdiction. It is provided by the Code of Civil Procedure (§ 2476, subd. 3) that the Surrogate’s Court of each county has jurisdiction exclusive of every other Surrogate’s Court to take proof of a will, to grant letters testamentary thereon, or to grant letters of administration in various cases, and among them, “ where the decedent, not being a resident of the State, died without the State, leaving personal property within that county, and no other; or leaving personal property which has since his death come into that county, and no other, and remains unadministered; ” and the surrogate has jurisdiction to issue ancillary letters of administration.

That there was no need of ancillary letters of administration upon the estate of Mrs. Fitch is manifest. The argument of the appellant necessarily is that the jurisdiction of the surrogate to set in motion the machinery for the imposition of a tax on the Consolidated Gas Company’s shares depended upon his authority to issue ancillary letters of administration in this particular case, and hence the contention is that it is brought within the ruling in the Embury case and analogous cases, namely, that “ if no mode is provided for assessing and collecting the tax, the law is imperfect, and cannot, as to such interests, be executed.’-’

The discussion is thus narrowed down to a consideration of the question whether jurisdiction depends upon the necessity or propriety of issuing letters of administration in a particular case. If that question is to be answered in the affirmative, then it is obvious that there is a defect in this Transfer Tax Law which would make it unenforcible in such a case as this. All that a foreign executor or administrator would have to do is to remain inactive, conceal the existence of taxable property of the decedent within this State, and thus evade the imposition of the tax. But we think the proper interpretation of the 10th section of this act with respect to jurisdiction is, that the provision relates to the designation of the particular Surrogate’s Court in which the proceedings are to be had, and that they are to be had in that Surrogate’s Court of the county in the State which has jurisdiction to grant-letters testamentary or of administration of the estate of a decedent .whose property is chargeable with the tax, or to appoint a trustee of the estate, or any part thereof, or to give ancillary letters thereon. Or, to state it differently, the provision relates to the officer by whom, and the place in which, the ¡proceeding is to be had, and the reference is to potential jurisdiction and not to its actual exercise, or the necessity of actually exercising it. There is nothing contained in the 10th section referring to a petition for ancillary letters, or letter^ of admim istration, at variance with this view. There is only a provision for the protection of the county treasurer or comptroller, as a person to be cited if such letters are applied for.

The construction above given accords with another provision of the Transfer Tax Law, which shows that proceedings for the imposition of a tax do not depend upon the fact of the necessity of granting letters. The 11th section provides that the surrogate, upon the application of any interested party, including county treasurers or the comptroller of Hew York city, or upon his own motion, shall, as often as and whenever occasion may require, appoint a competent person as appraiser to fix the market value, at the time of the transfer thereof, of property of persons whose estates shall be subject to the payment of any tax imposed by this act.

We are, therefore, of the opinion that the surrogate had ample authority to appoint an appraiser, and that the order appealed from should be affirmed, with costs.

Van Brunt, P. J., Barrett, Rumsey and O’Brien, JJ., concurred.

Order affirmed, with costs.