either by himself or his legatee, to shield a legacy from taxation; because a legacy implies a bounty, and not the payment of a debt. Hence, the court, in ascertaining whether a legacy is taxable or not, has the right to determine, not only from the provisions of the will, but by extrinsic facts, if necessary, whether it is a voluntary gift or in payment of a legally enforceable debt. And if it appears that the legacy was a pure gratuity, the legatee, if he accepts it, must take it subject to the conditions upon which it was given, and subject also to the conditions which the law has impressed upon it. The payment of a tax cannot be avoided by the mere phraseology of the will. Declarations of the testator cannot rise above the law and abrogate its provisions. The tax cannot be eluded by the use of words not necessary to make the gift effective. If a testator makes a bequest or devise of property to his executors or trustees in lieu of their legal commissions and allowances, the excess beyond a reasonable compensation for their services is liable to a tax; and we know of no good reason why a legacy in payment for services, care, attention rendered a testator, should not be placed upon the same basis. This course protects the state from fraud, and prevents legatees from avoiding the tax which the statute has demanded.

#

For acts of kindness shown, for favors received, for some act done at an opportune moment, a testator may, at

the time of making his will, feel exceeding grateful, and think it his duty to express his appreciation and remembrance of them by legacies to those who have rendered them; but, unless some legal and enforceable claim exist against the testator by reason of them, a legacy thus given in grateful recognition of the kindly act of friends and relatives should be considered a bounty, and not the payment of a debt, unless the debt is in some manner established to the satisfaction of the court, and, for this reason, should not be exempt from taxation."

The state has the right to inquire into the services claimed to have been rendered, their character and value, and to the extent only that the bequest was not a gratuity it would be exempt.296

Sums loaned by a testator to his sons, and which his will provided should be included in his estate and divided equally among his children, the loans to be deducted from the share of the children to whom made, are not advancements, but legacies subject to taxation.297

Where the bequest of the residue of testator's estate includes a note made by the legatee, the amount of such note is subject to the legacy tax.298

Testatrix was indebted to one B. upon a note. B. bequeathed to testatrix the amount of the debt, and the latter, reciting the indebtedness, bequeathed a portion of the same to relatives of B., who claimed it was not taxable, as being a legacy in payment of a debt. Held taxable; that, under the terms of B.'s will, all property was bequeathed to testatrix, and thereby all obligation upon the note ceased. "There was, in no sense, any debt, legal or moral, to the beneficiaries under her own will. They take the legacy by virtue of her bounty, and her recital therein of the note, and the deduction from the face thereof, is simply to measure the amount of the gift to the legatees, and to indicate the reason therefor."

99 299

Where testatrix bequeathed all her property to one H., "in consideration of a home for me at his house during my life," and the will was executed pursuant to an agreement that it should be so done, and that H. should provide for her during life, which was done, held, that the legacy was

296 In re Richardson, 8 N. Y. Law J. 1392.

297 In re Bartlett (1893) 4 Misc. Rep. 380, 25 N. Y. Supp. 990.

298 In re Tuigg's Estate (July 10, 1891) 2 Con. Sur. 633, 15 N. Y. Supp. 548.

299 In re Wright, 6 N. Y. Law J. 317.

not a gift, but the payment of a valid claim, and was therefore not subject to the legacy tax.300

So, a debt released by will, where the debt was previously outlawed by the statute of limitations, passes nothing, and the amount of such debt cannot be assessed for the tax.301

In England, however, under the legacy act, the rule is different, and the forgiveness of a bond debt by will was held to be a legacy liable to the duty; 302 and in one case, where the testatrix generously provided in her will for the payment of all her husband's debts, the creditors were, nevertheless, compelled to pay the duty.303

Where, however, the legacy is a pure gratuity for services rendered testator without expectation of reward or compensation, it is taxable,304 and where a testatrix, reciting that A. was indebted to her on bond, declared that in case he made no demand against her estate for boarding her she bequeathed him the debt due by him and directed her executors to cancel the bond, the legacy is liable.305

300 In re Hulse's Estate (Surr.) 15 N. Y. Supp. 770.

301 Stinger v. Com., 26 Pa. St. 429. See Williamson v. Naylor, 3 Younge & C. 208.

302 Attorney General v. Holbrook, 3 Younge & J. 114.

303 Foster v. Ley, 2 Scott, 438; Turner v. Martin, 7 De Gex, M. & G. 429.

304 In re Gibbons' Estate, 16 Phila. 218.

305 Tyson's Appeal, 10 Pa. St. 220. See In re Tuigg's Estate, supra. (347)

SURROGATES,

CHAPTER VII.

DISTRICT ATTORNEYS, COUNTY TREAS-

URERS, REGISTERS, EXECUTORS, AND OTHER

OFFICERS.

62. Surrogates, District Attorneys, County Treasurers, Registers, and Appraisers.

63. Executors, Administrators, and Trustees.

64. Liability of Executors, Administrators, Trustees, Heirs, and

Legatees inter Se.

65. Compromises between Public Officers, Executors, and Legatees.

§ 62. Surrogates, District Attorneys, County Treasurers, Registers, and Appraisers.

Under collateral inheritance, legacy, and succession tax laws various powers, duties, and liabilities in connection with the assessment, collection, and payment of the tax are imposed upon surrogate, probate, and orphans' courts, district attorneys, registers, county treasurers, executors, administrators, trustees, appraisers, and other persons and officials, which it is proposed to consider in the present chapter. As these duties are principally statutory, some of the provisions of law relating thereto may be consulted in the Appendix.

Questions concerning the appraisement or valuation of estates subject to the tax have been treated separately,1 and proceedings regarding the remedy and practice to be pursued under these acts have been reserved for the last chapter.2

Surrogates' courts in New York are constitutionally empowered to hear and determine all questions relating to the

1 Chapter 5.

2 Chapter 8.

3

estates of decedents arising under these statutes, and it would appear that exclusive jurisdiction, in the first instance, has been conferred upon the surrogate to appoint the appraiser who is to value the taxable property, and upon his report to assess, fix, and determine the liability of property to this tax, and to enforce payment thereof, subject to review by appeal, as in other cases.1

He

The initial steps which the statute requires the surrogate to take are those of taxing officers, and not of judges. appoints an appraiser to appraise the cash value of the property. Upon the coming in of the report he may enter an order determining the cash value of the estate: The order may be based upon the report, or upon any other proof before him, and this he does "as of course." But the party aggrieved may take an appeal from the order thus made to the surrogate, and then for the first time the procedure takes on a judicial character."

6

The act of 1887 ° provided that the surrogate should have jurisdiction to hear and determine all questions in relation to the tax. The same provision is contained in the transfer tax act of 1892. The power and jurisdiction of the surrogate under these acts is now definitely settled under the New York statutes by many recent adjudications. He has full power to determine all questions of liability or exemption. When we read all the provisions of these acts it is perfectly apparent that an especial system of taxation was created

8 In re McPherson, 104 N. Y. 323, 324, 10 N. E. 685.

4 Appendix, I. a, Laws N. Y. 1887, c. 713, § 15; In re McPherson, supra. See U. S. v. Trucks, 27 Fed. 541; Central Trust Co. v. New York City & N. R. Co., 47 Hun, 587; Id., reversed on another point, 110 N. Y. 250, 18 N. E. 92; Anderson v. Anderson, 112 N. Y. 104, 113, 19 N. E. 427. See chapter 5, §§ 50, 55.

Weston v. Goodrich (1895; Sup.) 33 N. Y. Supp. 382.

6 Chapter 713, § 15.

Appendix, I. e, c. 399, § 10.