App. Div.] Third Department, May, 1909. to provide for the issue of sisters and brothers who had died before the making of the will. The appellants otherwise contend. In Huntress v. Place (137 Mass. 409) the testator had provided that the residue of his property should be "equally divided among my brothers and sisters and their heirs." When the will was made, and at the testator's death, there were living three brothers and one sister and children and grandchildren of two deceased sisters. It was held that the testator intended that the heirs of his deceased sisters should take by right of representation equally with his surviving brothers and sisters. In the unanimous opinion it is said: "It is conceded that the testator knew of the decease of his two sisters, and of the existence of their issue, as set cut in the petition. The argument of the appellants is, that this is a gift to a class; that only those of the class take who survive the testator; and that the words and their heirs' are words of limitation and were used to express the intention of the testator to give the absolute property. The argument of the appellees is, that by the use of the plural word 'sisters,' the testator must have intended, not only his sister who was living, but his sisters who had deceased; and as these last could not take, the testator intended that in the division their heirs should take the shares appropriate to them. "This question is one of difficulty, but we are inclined to the view of the appellees, for the reasons given in Gowling v. Thompson, L. R. 11 Eq. 366, n.” In Gowling v. Thompson, referred to, the testator's bequest was to his brothers and sisters, or their issue, in equal shares as tenants in common, and to their respective heirs, administrators and assigns. It was held that the children of a deceased sister took under the words "or their issue;" that those words would be construed to be part of the description of the class and not a substitutional gift in case one of the class previously described dies; that since the testator had but one sister, and he gave the bequests to his sisters or their issue, the word "sisters" must have been used in the plural in place of the singular to indicate the stirps, and that the words "or their issue" were a part of the description of the class. The case at bar cannot be distinguished from these cases cited. The gift in the case at bar is to his "sisters and brothers or their APP. DIV.-VOL. CXXXII. 35 Third Department, May, 1909. [Vol. 132. No cases are The general heirs," share and share alike. The word "or," as thus used, probably has no significance if used alone, but when used in connection with a gift to his "brothers or their heirs," when one brother only was living at the time of the making of the will, would seem to indicate an intention that where the brothers were not living so they could not take, their heirs should take for them. called to our attention which hold any different rule. rule that a gift to a class includes only those in the class who were living at the time of the making of the will is not questioned. rule is simply held to be inapplicable to this case because of an expressed intention to include the heirs of the brothers and sisters who were dead. For these reasons we think the decree should in this respect be modified, and as modified affirmed, with costs to appellant out of the estate. The Decree modified as per opinion, and as so modified unanimously affirmed, with costs to appellant out of the estate. THE PEOPLE OF THE STATE OF NEW YORK ex rel. LINCOLN TRUST COMPANY, Relator, v. MARTIN H. GLYNN, as Comptroller of the State of New York, Respondent. Third Department, May 5, 1909. Tax-franchise tax-basis of assessment. In assessing a franchise tax the basis of the tax should be the average amount of capital, surplus and undivided profits during the tax year and not the amount on the last day of the year. The amendment to section 182 of the Tax Law made by chapter 474 of the Laws of 1906, which provides that the corporation shall pay in advance an annual tax, does not affect section 187a providing for a franchise tax on trust companies, nor does it change the method of computing the tax. CERTIORARI issued out of the Supreme Court in the county of Albany, N. Y., and attested on the 29th day of August, 1908, directed to Martin H. Glynn, Comptroller of the State of New York, commanding him to certify and return all and singular his proceedings had in regard to the assessment of a franchise tax against the relator for the year ending June 30, 1907. App. Div.] Third Department, May, 1909. Bowers & Sands [Latham G. Reed of counsel], for the relator. Edward R. O'Malley [Edward H. Letchworth of counsel], for the respondent. SMITH, P. J.: The relator has been assessed for a franchise tax for the year ending June 30, 1907, under section 187a of the Tax Law. (Laws of 1896, chap. 908, added by Laws of 1901, chap. 132, and amd. by Laws of 1901, chap. 535.) The Comptroller has made the basis of this tax the average amount of capital, surplus and undivided profits during the year preceding June 30, 1907. The relator contends that the basis of this tax must be the amount of capital, surplus and undivided profits upon the 30th day of June, 1907. This difference presents the sole question here for determination. In People ex rel. Mutual Trust Co. v. Miller (177 N. Y. 51) the relator had been in existence only six days prior to June thirtieth. The company having no undivided profits, the Comptroller made a basis of his tax the amount of capital and surplus upon June thirtieth and taxed the full amount required by the statute. The Court of Appeals there held that inasmuch as the relator had done business only six days within that year, it could only be assessed for six three hundred and sixty-fifths part of the tax. Judge VANN in writing for the court says: "If a trust company does not commence business until six days before the fiscal year ends, or if it ceases to do business six days after the year begins, the tax for doing business by the year requires apportionment. While the Legislature did not so provide in express terms, it is a fair and reasonable impli cation from the words used that such was its intention. When by section 182 of the Tax Law it imposed an annual tax payable annually upon every corporation of a certain class, to be computed upon the basis of the amount of its capital stock' employed within the State' during the year, it did not say expressly that the assessment should be determined by the average amount of capital so employed but we held that this was what was necessarily meant. * "Section 187a does not fix the date when the capital stock, surplus and undivided profits shall be taken, although they are variable quantities of which an average can be made for the year the same as an average of the capital stock employed by the year was used in Third Department, May, 1909. [Vol. 132. the case of the Brooklyn Rapid Transit Company and with as much reason." While the case cited is not an exact parallel to the case at bar, we are unable to distinguish the case at bar from the principle therein decided. There is no more reason why the year should be apportioned as to the time in which the corporation has been in existence than why the capital, surplus and undivided profits should be averaged to ascertain the basis of taxation. It presents an equitable basis, not unfair to the corporation, which by chance upon the special date may have a larger amount of capital, surplus and undivided profits, and not unfair to the State, if by chance upon that special date the corporation should have a lesser amount. The relator claims that the rule is changed by chapter 474 of the Laws of 1906 which amends section 182 of the Tax Law and provides that the corporation shall pay in advance an annual tax. But this amendment was of section 182 and did not affect section 187a under which this tax is laid. But another answer lies in the fact that while the amendment provides that the tax shall be paid in advance, which under former decisions had been held to be a tax for preceding years, the method of computation was not changed, but the ascertainment of the tax was to be upon the capital employed during the preceding year, and would fairly be upon the average capital employed, as was held under the statute before amended. We are of opinion, therefore, that the tax was properly assessed by the Comptroller, and that the determination should be confirmed. Determination unanimously confirmed, with fifty dollars costs and disbursements. H. NELSON BROWN, Respondent, v. EDGAR A. NEWELL, Appellant. Third Department, May 7, 1909. Evidence-hearsay - harmless error - new trial — admissions — newlydiscovered evidence. Evidence in an action to construe an agreement for the settlement of a dispute examined, and held, to support a finding in favor of the plaintiff. It is error to admit in evidence a page from a scientific book on inks, although one of the expert witnesses testifies that, generally speaking, he agrees with the statements therein. App. Div.] Third Department, May, 1909. Such evidence is hearsay, but where the trial was before the court without a jury and the evidence did not relate to the main issue, but merely to the genuineness of a memorandum whose sole value was to corroborate the other evidence, which of itself was sufficient to sustain the judgment, the error does not require a reversal. An admission against interest, alleged by one of the defendant's experts to have been made by plaintiff while the witness was in his employ, and recollections of the defendant who had testified on the trial in support of the judgment, in view of the suspicious circumstances, do not constitute such newly-discovered evidence as to justify a new trial. KELLOGG, J., dissented, with opinion. APPEAL by the defendant, Edgar A. Newell, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of St. Lawrence on the 4th day of May, 1908, upon the decision of the court, rendered after a trial at the St. Lawrence Special Term, and also from an order entered in said clerk's office on the 31st day of August, 1908, denying the defendant's motion for a new trial on the ground of newly-discovered evidence. The action was commenced to recover certain property alleged by the plaintiff to have been secured from him by the defendant by fraudulent statements and misrepresentations. After the commencement of such action a settlement thereof was agreed upon between the parties. In carrying out the settlement a dispute arose between them as to what the agreement was. At the opening of the trial the parties stipulated that, although the complaint did not state the agreement of settlement, nevertheless if the plaintiff proves the agreement as claimed by him, a recovery might be had thereon, and that the question to be decided was what the agreement of settlement was, and that the recovery should be had only upon that agreement, and not upon the original fraud as alleged. In May, 1904, the defendant sold to the plaintiff one-third of the shares of the capital stock of the W. H. Linton Company, of which the defendant was president, and in which one W. II. Linton owned some of the shares. In consideration of such sale of stock to the plaintiff he conveyed to the defendant Newell a house and lot in Ogdensburg, and delivered to him his check for $200, and indorsed notes amounting, with such check, to $1,200. Newell retained title. to such house and lot, but turned over to Linton, for the shares the |