In re De Peyster's Estate

• Decision Date: 24 February 1914
• Citation: 210 N.Y. 216,104 N.E. 714
• Parties: In re DE PEYSTER'S ESTATE.
• Court: New York Court of Appeals Court of Appeals

210 N.Y. 216

104 N.E. 714

In re DE PEYSTER'S ESTATE.

Court of Appeals of New York.

Feb. 24, 1914.

Appeal from Supreme Court, Appellate Division, First Department.

Proceedings to determine whether a bequest to the New York Historical Society was exempt from the transfer tax. From an order of the Appellate Division (156 App. Div. 938,141 N. Y. Supp. 1116) affirming an order of the Surrogate's Court exempting such bequest, the State Comptroller appeals. Reversed .

Thomas E. Rush, of New York City, for appellant.

Henry A. Miller and Arthur Sutherland, both of New York City, for respondent.

CHASE, J.

Catharine Augusta De Peyster died January 25, 1911, leaving a will by which she bequeathed the residue and principal part of her property to the New York Historical Society. In a transfer tax proceeding and on October 10, 1912, an order was entered in the Surrogate's Court, New York county, assessing a transfer tax against said society in the sum of $50,756.61. An appeal was taken to the surrogate from the order fixing the tax on the express ground ‘that the said New York Historical Society was incorporated and is maintained exclusively for educational purposes and is an educational corporation within the meaning of section 221 of the Transfer Tax Law (Consol. Laws, c. 60), and under and by virtue of such section 221 the transfer of the property under the will of the above-named decedent to the New York Historical Society is not subject to the payment of a transfer tax.’ The order fixing the tax was modified so as to exempt said society from such tax and an appeal was taken by the comptroller from the order of the surrogate to the Appellate Division, where such order was unanimously affirmed (Matter of De Peyster, 156 App. Div. 938, 141 N. Y. Supp. 1116), and an appeal has been taken from such order of affirmance to this court.

The statute as it existed at the date of the death of the testatrix, upon the construction of which the question involved on this appeal must be determined, provided, so far as material, as follows: But ‘any property devised or bequeathed for religious ceremonies, observances or commemorative services of or for the deceased donor, or to any person who is a bishop or to any religious, educational, charitable, missionary, benevolent, hospital or infirmary corporation, * * * including corporations organized exclusively for Bible or tract purposes shall be exempted from and not subject to the provisions of this article. There shall also be exempted from and not subject to the provisions of this article personal property other than money or securities bequeathed to a corporation or association * * * organized exclusively for the moral or mental improvement of men or women or for scientific, literary, library, patriotic, cemetery or historical purposes or for the enforcement of laws relating to children or animals or for two or more of such purposes and used exclusively for carrying out one or more of such purposes.’ Tax Law (Consol. Laws, c. 69) § 221, as amended (L. 1911, c. 732, § 1).

[1][2] If the respondent is organized exclusively for historical purposes, the bequest of the testatrix, not being personal property other than money or securities, is subject to the transfer tax. If it is an educational corporation within the meaning of the statute, it is exempt from such tax. In order to determine the status of a corporation and to ascertain the purposes for which it was incorporated, recourse must be had to the act by which it was incorporated or to its charter and the statute under the authority of which it was framed. Matter of Watson, 171 N. Y. 256, 63 N. E. 1109;Matter of White, 118 App. Div. 869, 870,103 N. Y. Supp. 688;Matter of Moses, 138 App. Div. 525,123 N. Y. Supp. 443.

This court, in People ex rel. Wall & H. St. R. Co. v. Miller, 181 N. Y. 328, 334,73 N. E. 1102, 1104, in considering the charter of a corporation and the business done under its charter and the relations of the corporation to the state, say: ‘And when we appeal to the reason of the thing it seems plain that the chartered privileges of a corporation as defined in its certificate of incorporation, which is invariably framed on the language of the corporators, should be the index to its relations to the state, rather than the possibly sporadic and shifting exercise of any one or more of a larger number of the powers delegated to it.’

In Matter of Mergentime, 129 App. Div. 367, 374,113 N. Y. Supp. 948, 953, affirmed on opinion below 195 N. Y. 572, 88 N. E . 1125, the court say: ‘As this corporation was established by a special charter and not incorporated under a general law, the question as to the nature of the corporation must be determined by the objects specified by the legislature as those for which it was incorporated.’

The respondent was organized by special charter (Laws of 1809, c. 26), entitled ‘An act to incorporate the New York Historical Society.’ The act recites that the persons named therein and others have formed themselves into an association ‘for the purpose of discovering, procuring and preserving whatever may relate to the natural, civil, literary and ecclesiastical history of the United States in general and of this state in particular,’ and have petitioned to be incorporated ‘that thereby such, the purpose and design of the said society may be the more effectually subserved and promoted.’ The act also provides that the society shall ‘have power from time to time to make, constitute, ordain and establish such constitutions, by-laws, ordinances and regulations as they shall judge proper for * * * conducting, regulating and managing all the affairs and business of the said corporation. * * *’ In pursuance of such charter provision the following by-law was adopted: ‘The object of the society is to discover, procure, and preserve whatever may relate to the natural, civil, literary, and ecclesiastical history of the United States in general and to this state in particular. Also to establish and maintain collections in art and archaeology.’

The act is declared to be a public act, and it provides that it ‘shall be construed most favorable to subserve and promote the purpose and design of the said society.’

A corporation or association organized exclusively for scientific, literary, library, patriotic, or historical purposes, or for any one of such purposes, is necessarily to some extent educational in its nature, and in the results attained from such organization. An exclusively historical society does not gather books, manuscripts, pictures, and antiquities simply to hoard them. Its purpose is not alone to discover and preserve things and facts of historical value, but to keep and record them that they may be seen, read and studied, that greater knowledge may be attained from them. The Legislature, in including educational corporations or associations in the first part of the statute quoted, intended corporations or...