In re Palmer's Estate

• Decision Date: 05 December 1905
• Citation: 76 N.E. 16,183 N.Y. 238
• Parties: In re PALMER'S ESTATE.
• Court: New York Court of Appeals Court of Appeals

183 N.Y. 238

76 N.E. 16

In re PALMER'S ESTATE.

Court of Appeals of New York.

Dec. 5, 1905.

Appeal from Supreme Court, Appellate Division, First Department.

In the matter of the estate of Potter Palmer, deceased. Proceedings by the Comptroller of the state of New York against Adrian C. Honoré, executor, and others. From an order of the Appellate Division (92 N. Y. Supp. 1137,102 App. Div. 616), affirming an order of the Surrogate's Court assessing a tax on the estate, Honoré and others appeal. Affirmed.

Charles K. Carpenter, for appellants.

Emmet R. Olcott, for respondent.

GRAT, J.

Potter Palmer, a resident of the state of Illinois, died in 1902, and a portion of his estate consisted in 4,855 shares of the capital stock of the New York Central & Hudson River Railroad Company, a corporation of this state. This proceeding to appraise the value of that stock, under the transfer tax law of the state, for the imposition of a tax, resulted in the fixing of a tax upon the life estate of his widow only. Though some other questions were raised below on both sides, this appeal brings up no other than the question of any liability to be taxed here at all, and, if that be affirmed, the further question of the proper valuation of the stock for the purpose. The primary question, as to the liability to taxation under the provisions of our transfer tax law, must be regarded as having been determined by the decision of this court in Matter of Bronson, 150 N. Y. 1, 44 N. E. 707, 34 L. R. A. 238, 55 Am. St. Rep. 632. In that case we held that, though the shares of capital stock of a domestic corporation were held and owned by a nonresident decedent, they represented an interest in property, which was within the jurisdiction of this state for the purpose of taxation, upon its transfer by operation of any law or by act of its owner. It is unnecessary to discuss the question further in the present case, whose facts bring it precisely within the authority of Bronson's Case.

The appellant claims, however, if the transfer of the stock is taxable, that the tax should only be ‘upon that proportion of its value which represents the proportion of the capital and assets of the company employed within the state of New York’; that is to say, because it was made to appear that about 36 per cent. of the corporate capital was invested in properties without the state, it is argued that the appraisement of the value of the capital stock, in this proceeding, should have been proportionately less. The basis for this claim is the proposition that the corporation itself is not taxable by the state upon its investments in railroad properties situated outside of the state, under the provisions of section 182 of the general tax law (Law 1896, p. 856, c. 908), which impose an annual franchise tax upon the...