This is an appeal by the executor and certain beneficiaries under the will of Leonard J. Gordon from an order of the surrogate assessing a transfer tax herein. The sole question presented is whether the obligation of a New Fork life insurance company under its policy, payable to a non-resident or his legal representa*211tives or assigns, is property taxable within the meaning of the Transfer Tax Law, and subjects the estate to a tax, although the policy is not within the State. Leonard J. Gordon, a resident of Jersey City, H. J., died on the 17tli day of January, 1905, leaving a will by which his estate was to be divided among a number of beneficiaries, the nearest being brothers and sisters. He left certain property within the State of Hew York conceded to be taxable. Among his assets was a life insurance policy for the sum of §5,000, issued to him by the Equitable Life Assurance Society, a Hew York stock corporation, organized under the Laws of 1853,* and having its principal office in the city and State of Hew York. The policy was issued to Gordon June 13, 1889, and was in Hew Jersey at his death. It was issued from the home office where all policies are issued and the society’s policies provide that all premiums are payable in Hew York. The policy provided as follows: “The Equitable Society does promise to pay to Leonard J. Gordon, his executors, administrators or assigns the sum of Five thousand dollars (any indebtedness to the Society on account of this contract to be first deducted therefrom) at the office of the Society in the City of Hew York 'within sixty days after satisfactory proofs of death of said Leonard J. Gordon, of Jersey City, in the County of Hudson, State of Hew Jersey, shall have been furnished to the Society at its said office.” The assistant registrar of the society testified that “ Proof of death made in this instance was presented to the company at the home office, 120 Broadway, Hew York ” and that “ all domestic claims are presented here and paid at the home office. * * *
They have to be filed here with the home office. All policies are paid from the home office; that is our invariable custom. There are no death claims paid by any agency outside of the home office in Hew York city, in the United States.” The policy was paid by a check of the insurance society drawn to the order of William E. Gordon, as the executor of the estate of Leonard J. Gordon, on the Equitable Trust Company of Hew York. It appears that since the passage by the State of Hew Jersey of the Insurance Law of 1902,† the Equitable Life Assurance Society has designated the Commissioner of Banks and Insurance for Hew Jersey as a person upon whom *212process against it could be served in that State, and since the issuing of the policy in question it had real estate in New Jersey of at least $5,000 in value and had a certificate which would authorize the society to do business in that State. The statute does not require the society to have a deposit in the State of New Jersey for the security of policies issued to residents of that State and the proofs do not show that the society had any deposit in that State. The appraiser held • that the obligation of the insurance company, evidenced by the policy, to pay the $5,000 was part of the assets or property of a nonresident within this State, and, therefore, taxable, and the surrogate confirmed this report and the tax assessed upon the property. Subdivision 2 of section 220 of chapter 908 of the Laws of 1890, as amended by chapter 284 of the Laws of 1897, imposes a tax “ when the transfer is by will or intestate law, of property within the State, and the decedent was a nonresident of the State at the time of his death.” Section 242 of said act, as amended by chapter 173 of the Laws of 1901, provides that “the words ‘estate’ and ‘property’ as used in this article* shall be taken to mean the property or interest therein of the testator, * * *' passing or transferred * * * and shall include "all property or interest therein, whether situated within or without this State.”
The obligation of the insurance company is property and part of the assets of the estate. Matter of Knoedler (140 N. Y. 377) was a case Avhich involved the assessment of the value of policies payable to the testator, his executors, administrators and assigns, of a resident of New York. In answer to the contention that these policies were not property of which the testator was seized or possessed at the time of his death, the court said that “ they were obligations to pay money at a future date, and .every instrument duly executed and having a lawful consideration which secures to the holder the payment of money at a specified time, confers upon him a right of property. The statute has declared Avliat shall be deemed assets of the estate of a deceased person and subject to distribution by his executors or administrators (4 B. S. [Sth ed.] p. 2556, § 6†) and includes among them all dioses in action and ‘ every other species of personal property and effects.’ It is plain that these policies *213were assets of the estate. * * * The taxable transfer law * proceeds upon a new theory of the right of the government to tax, and establishes a new system of taxation. It taxes the right of succession to property and measures the tax in the method specifically prescribed. All property having an appraisable value must be considered whether it is such as might be taxed under the general law or not. * * "" It is, therefore, immaterial whether life insurance policies can be valued and assessed for taxation under the general law,” and sustained the assessment and the tax.
A policy of life insurance is merely a contract, and like every other contract to pay money, is a chose in action with all the ordinary incidents of every other chose in action and the relation between the insurance company and the assured is that of debtor and creditor. (Olmsted v. Keyes, 85 N. Y. 593.) The policy being merely written evidence of indebtedness due from a resident debtor to a non-resident creditor it would seem that the authorities support the proposition that it is property in this State. The jurisdiction of the State over the debtor gives jurisdiction for the purposes of taxation.
The Supreme Court of the United States, in Blackstone v. Miller (188 U. S. 189), said that the doctrine that the situs of personal property was the domicile of the owner was merely a fiction that must yield to fact; that it was the law of the place where the debtor resided which gave the debt validity and forced the debtor to pay, and that it was within the constitutional power of the State, wherein the debtor resided to tax the obligation from him to a nonresident. The doctrine of this case has been accepted by the Court of Appeals in Matter of Clinch (180 N. Y. 300), where Judge Haight, referring to the above decision, said : “ This decision was but the logical result of an earlier determination by the court in Chicago, Rock Island & P. R. Co. v. Sturm (174 U. S. 710), where it was held that a debt due from a resident to a non-resident could be seized by a creditor of the latter in the domicile of the debtor,” and sustained a transfer tax upon the interest in the estate of a non-resident decedent whose will had been admitted to probate in Hew York county, where one of the executors resided. The cases wore thoroughly examined in the opinion of Mr. Justice Hatch in Matter of Daly (100 App. Div. 373; affd., 182 N. Y. 524), *214where it was held that debts due from solvent debtors within the State of New York to a non-resident creditor which are actually converted into money in this State, constituted property within the State of New York within the meaning of the Transfer Tax Law; and in Matter of Hewitt (181 N. Y. 547) the Court of Appeals affirmed a decision of the surrogate holding that certificates of deposit issued by a New York bank were taxable when owned by a non-resident decedent, and when such certificates were at the time of decedent’s death without the State.
In the Hewitt case the certificate acknowledged receipt of a given sum “ upon which the said company will allow interest at the annual rent of three per cent from this date, and on demand will repay the like amount in current funds, with the interest to the said Abram S. Hewitt, or his assigns, on the return of this certificate, which is assignable only on the books of the company.” The appellant in that case strenuously urged that said certificates came within the exception stated by Mr. Justice Holmes in the Blackstone Case (supra), of bonds and negotiable instruments which are considered to be not merely evidence of the debt, but inseparable from the debt itself. The brief submitted contained this statement: “A certificate of deposit is a written instrument for the payment of money only. It is as concrete a chose in action, the debt which is embodied in it is as inseparable from it, it is as completely property in itself, it is itself as much the subject of larceny conversion, attachment and replevin, and it is as fully and exclusively subject to taxation by the jurisdiction which contains it, as was the case with the contracts for the payment of the purchase price of lands in People v. Ogdensburgh (48 N. Y. 390 *); the corporate bonds in State Tax on Foreign Held Bonds (15 Wall. 300); Matter of Bronson (150 N. Y. 1), and Matter of Whiting (2 App. Div. 590; affd., 150 N. Y. 27), and the individual notes or bonds and mortgages in People v. Smith † (88 N. Y. 576); New Orleans v. Stempel (175 U. S. 309), and Matter of Preston (75 App. Div. 250). The certificates of deposit here have no feature which was not present in one or other of the securities before the courts in those cases.” The learned surrogate, however, said (N. Y. L. J., June 18, 1904): *215“ The certificates of trust companies evidenced deposits of money and not loans. They were not negotiable instruments, for they were not payable to the order of the depositor, and it was expressly stipulated that they were ‘ assignable only on the books of the company.’ In this respect they differ from the documents passed upon in all of the cases cited by the appellant in which the language of the papers in question appear; ” and the decision of the surrogate was affirmed in this court (98 App. Div. 624) and in the Court of Appeals (181 N. Y. 541).
If these certificates of deposit, carrying interest, payable to the depositor or his assigns and not assignable except upon the books of the company, do not come within the exception noted of bonds and negotiable instruments, it would seem that policies of insurance could not. To hold that such an obligation comes under the doctrine of negotiable instruments would do violence to established principles.
It seems to me that the above decisions are conclusive upon this court. The debtor, the insurance company, was a New York corporation having its main office in New York city. There it issued its policies, there it received the premiums thereon and kept and invested and used the same, and it was upon the consideration of the receipt and use of those premiums that it made its promise to pay upon the given event the amount agreed upon at its main office there. The company existed by virtue of the laws of this State, and its rights, obligations and duties were fixed thereby, and if, as we have seen is the case, the amount due on a policy to a resident is a ]iart of the property or assets of the estate of that resident decedent, and taxable under the Transfer Tax Law, it follows that the debt due the estate of a non-resident decedent policyholder is likewise taxable, because the debt is property within the State.
The order, therefore, should be affirmed, with costs to the respondents.
O’Brien, P. J., concurred.
Order appealed from reversed and order fixing transfer tax modified as directed in opinion, with ten dollars costs and disbursements to appellant. „ Settle order on notice.
See Laws of 1853, chap. 463, as amd.— [Rep.
See Laws of FT. J. of 1903, c.hap. 134, as amd.— [Rep.
Tax Law, art. 10, as amd.—[Rep.
Revised in Code Civ. Proc. § 2712.—[Rep.
Citations are not fully set forth in the brief.— [Rep.
People ex rel. Jefferson v. Smith.— [Rep.