In re Harbeck's Will

• Decision Date: 09 January 1900
• Citation: 55 N.E. 850,161 N.Y. 211
• Parties: In re HARBECK'S WILL.
• Court: New York Court of Appeals Court of Appeals

161 N.Y. 211

55 N.E. 850

In re HARBECK'S WILL.

Court of Appeals of New York.

Jan. 9, 1900.

Appeal from supreme court, appellate division, First department.

In the matter of the estate of John H. Harbeck, deceased. From a decree of the surrogate declaring the trust fund held by Charles T. Harbeck as trustee subject to the inheritance tax, affirmed by the appellate division (59 N. Y. Supp. 362), the trustee and another appeal. Reversed.

John H. Harbeck died February 2, 1878, leaving a last will and testament bearing date February 19, 1877, which was duly proved in the surrogate's court of the county of New York February 19, 1878. Only the fourth paragraph of the will is involved in this review, and it reads as follows: ‘Fourth. I give and bequeath to my said executrix and executors the sum of three hundred thousand dollars, to have and to hold the same to my said executors and executrix, and to the survivors and survivor of them, in trust, nevertheless, for the uses and purposes following; that is to say: That they shall as soon as practicable after my decease loan out or invest the same upon bond and mortgage, or in the public stocks or securities of the United States or state of New York, or in such other securities as they in their best judgment shall deem proper, and shall semiannually thereafter pay unto my said wife, Eliza D. Harbeck, the whole of the interest or income thereof so long as she shall live, and upon her death to pay and deliver over the aforesaid principal sum of three hundred thousand dollars to such person or persons as the said Eliza D. Harbeck shall in and by her last will and testament give and bequeath the same, and, in default of such last will and testament, then to pay and deliver over the same to such person or persons, and in the same proportions, as by the present laws of the state of New York would take and inherit real estate from the said Eliza D. Harbeck in case of her dying intestate seised and possessed thereof.’ Eliza D. Harbeck, the living beneficiary named in the will, died on the 5th day of January, 1896, leaving a last will and testament bearing date October 20th, 1887, in and by which she executed the power of appointment authorized by the will of her husband. Her will was probated in the surrogate's court of the county of New York on February 3, 1896; and the provision by which she exercised the power of appointment, in so far as the same is material, reads as follows: ‘Third. Under and by virtue of the power and authority given to me in and by the last will and testament of my deceased husband, John H. Harbeck, bearing date the 19th day of February, 1877, and duly proved before the surrogate of the county of New York on the 19th day of February, 1878, I do give and bequeath the principal sum of three hundred thousand dollars, which in and by the fourth section or subdivision of said last will and testament of said John H. Harbeck, deceased, is given to the executrix and executors thereof in trust for my benefit so long as I shall live, as follows, viz.’ Here follow the names of 21 legatees, to whom this trust fund is directed to be paid in different sums. After the death of Eliza D. Harbeck, in 1896, the surrogate appointed an appraiser to appraise the value of the trust fund and of the different interests therein. The appraiser reported that the fund was not subject to taxation under the transfer tax law, and an order as of course was entered in the surrogate's court confirming said report. From this order an appeal was taken to the surrogate, where it was reversed, and the matter remitted to the appraiser to ascertain the value of the trust fund and of the different interests therein. Thereupon the trustee appealed to the appellate division of the supreme court, where the order of the surrogate was affirmed. From that order the trustee appeals to this court.

David B. Hill, for appellant trustee.

Henry A. Himmelmann, for special guardian.

Emmett R. Olcott, for comptroller.

PARKER, C. J. (after stating the facts).

Several years before the appearance on the statute books of this state of a taxable transfer law, John H. Harbeck died, leaving a last will and testament, by which he bequeathed the sum of $300,000 in trust, the income thereof to be paid to his wife during her life, and after her death the principal to such persons and in such proportions as she should appoint by her last will and testament; and, in the event of her failure to exercise the power of appointment, it should go according to the statute of descents. The appointor exercised the power thus vested in her, by a will dated October 20, 1887, and which was admitted to probate shortly after her death, and on the 3d day of February, 1898. The question for decision is whether this fund is subject to tax under the taxable transfer act of 1892. It is a question of no special public importance; for, since the death of the appointor, by an act which became a law April 16, 1897, the legislature has amended section 220 of the taxable transfer act so that it now expressly provides that ‘whenever any person or corporation shall exercise the power of appointment derived from any disposition of property made either before or after the passage of this act, such appointment when made shall be deemed a transfer taxable under the provisions of this act in the same manner as though the property to which such appointment relates belonged absolutely to the donee of such power and had been bequeathed or devised by such donee by will. * * *’ Apparently, this case has no importance other than as to the parties who are interested in the determination which must be made whether this particular trust fund shall be taxed by the state. In such case the rule is said to be that where the question is involved in doubt the doubt should be resolved in favor of the taxpayer, and against the taxing power (In re Fayerweather, 143 N. Y. 114, 38 N. E. 278); and the reason for the rule is given in Re Enston's Will, 113 N. Y. 174, 21 N. E. 87, as follows: ‘The tax imposed by the act is not a common burden upon all the property or upon the people within the state. It is not a general, but a special, tax, reaching only to special cases, and affecting only a special class of persons. * * * It is a well-established rule that a citizen cannot be subjected to special burdens without the clear warrant of law.’ The decision of this court in Re Miller's Estate, 110 N. Y. 216, 18 N. E. 139, is authority for the proposition that the act of 1897 is entitled to consideration at the hands of the court, as a legislative declaration that the subject-matter of the new provisions did not prior thereto constitute a part of the law. In that case the question was whether a legacy to an adopted child was taxable, the tax having been imposed in 1886 under the law as it then stood. But, the legislature having a year later passed an act expressly exempting adopted children, this court,...