In re Ueck's Estate

• Decision Date: 05 June 1941
• Citation: 286 N.Y. 1,35 N.E.2d 624
• Parties: In re UECK'S ESTATE.
• Court: New York Court of Appeals Court of Appeals

286 N.Y. 1

35 N.E.2d 624

In re UECK'S ESTATE.

Court of Appeals of New York.

June 5, 1941.

Appeal from Supreme Court, Appellate Division, Fourth Department.

Proceeding in the matter of the estate of Alfred C. Ueck, deceased, wherein Charles A. White, administrator for deceased, applied for an order authorizing the sale of real property of the deceased, and determining as to the priority of claims for tax liens against such real property with reference to other claims against the estate. From an order of the Appellate Division of the Supreme Court, 260 App.Div. 369, 22 N.Y.S.2d 740, affirming that part of decree of the Erie County Surrogate's Court directing the administrator, after payment of expenses and commissions, to pay to the County of Erie and the City of Buffalo the amounts paid by them as purchasers of certificates of tax sales on such real property for unpaid taxes of the city anc county, Elizabeth Staeball, contestant, appeals.

Order of the Appellate Division reversed, and matter remitted to the Surrogate's Court, with directions.

LEWIS, J., and LEHMAN, C. J., dissenting.

Louis W. Manchester, of Buffalo, for appellant.

Worthey B. Paul and John G. Lesswing, both of Buffalo, amici curiae, for John G. Lessing and others, executors of Frederick A. Mendlein.

Paul J. Batt, Co. Atty., of Buffalo (Genevieve Georgen, of Buffalo, of counsel), for respondent County of Erie.

Edward J. Sullivan, Corp. Counsel, of Buffalo (Howard H. Holmburg, of Buffalo, of counsel), for respondent City of Buffalo.

CONWAY, Judge.

One Alfred C. Ueck had been the owner of a number of parcels of real property in the city of Buffalo, county of Erie. Taxes assessed thereon were not paid by him and from time to time, over a period extending from 1926 to 1937, the properties were sold for non-payment of taxes at tax sales conducted both by the city of Buffalo and the county of Erie. Upon those sales, which occurred as to the same parcels year after year, the city of Buffalo and the county of Erie each obtained certificates of sale for some of the properties.

Ueck died a resident of the city of Buffalo, County of Erie, on September 30, 1936. At that time, both in the city and the county, taxes for the year 1936 had become liens. Subsequent to his death his properties were again sold for the non-payment of taxes for the year 1936.

Section 212 of the Surrogate's Court Act provides:

‘s 212. Payment of debts. Every executor and administrator must proceed with diligence to pay the debts of the deceased according to the following order:

‘1. Debts entitled to a preference under the laws of the United States and the state of New York.

‘2. Taxes assessed on property of the deceased previous to his death.

‘4. All recognizances, bonds, sealed instruments, notes, bills and unliquidated demands and accounts.’

The authorities clearly indicate that taxes, properly assessed on property of the deceased prior to his death in a tax district of which he was a resident, were his personal debts. Smith v. Cornell, 111 N.Y. 554, 557, 19 N.E. 271;Matter of Gill, 199 N.Y. 155, 92 N.E. 390;Village of Lynbrook v. Otto, 266 N.Y. 308, 194 N.E. 766;Village of Massapequa Park v. Massapequa Park Villa Sites, Inc., 278 N.Y. 28, 31, 15 N.E.2d 177. Ct. Village Law (Consol.Laws, ch. 64), ss 126, 133.

This proceeding was commenced by the administrator de bonis non of the goods, chattels and credits of Alfred C. Ueck, deceased, to obtain a decree which would determine the amount of unpaid taxes, penalties and interest which were liens upon decedent's property at the time of his death, and the right to priority of payment of them over claims against the estate theretofore adjudicated or allowed under subdivision 4 of section 212, supra.

A determination of those questions depends upon whether the real estate taxes upon decedent's properties were paid or discharged, as far as decedent was concerned, when the properties were sold for non-payment of taxes and purchased at the tax sales by the city of Buffalo and the county of Erie.

The learned Surrogate decided that, despite the sale of the properties for non-payment of taxes and the delivery of tax sale certificates therefor, there had been no payment or discharge of the taxes when the sales were to the city of Buffalo or the county of Erie, although there was such payment and discharge when the sales were to individuals or private corporations, since then the municipalities had been ‘paid in full.’ In other words, the surrogate held that the taxes were still ‘assessed’ on decedent's properties although such properties had been sold to pay the taxes, if the purchaser were the taxing municipality.

The administrator was thereupon directed to pay to the city of Buffalo and the county of Erie ‘the amounts paid by them, and each of them,’ for specified certificates of sale, together with interest on the certificates at the rate of twelve per centum per annum and all additional expenses. The decree of the surrogate was affirmed by the Appellate Division.

From this holding, curious results may ensue. For instance, there is added to real estate taxes, by reason of the enactment of subdivision 2 of section 212 of the Surrogate's Court Act, a substantial penalty in the event of the death of an owner, where, upon a prior sale of the property affected, for non-payment of taxes, a purchase thereof has been made by the taxing municipality, but not if made by any other person. Again, the taxing municipality may purchase real estate at tax sales year after year, await the owner's death, without taking any step to terminate his equity of redemption or to foreclose the tax sale certificate, and then collect from his estate all the taxes assessed, with twelve per centum annual penalty, for an indefinite number of years. We find no statute of limitations restricting such procedure. The duty imposedupon the executor or administrator is to pay ‘taxes assessed on property of the deceased previous to his death.’ In other words, whether a decedent leaves an estate for relatives or creditors beyond the first two classes mentioned in section 212 of the Surrogate's Court Act, supra, may depend on the identity of the purchaser at a sale or sales of his realty for non-payment of taxes. Such a startling result requires a careful consideration of the policy of the State as evidenced by applicable statutes and an examination of the Buffalo City Charter (Local Law No. 4 of 1927, published in Local Laws of 1932, p. 21) and the Erie County Tax Law.

The general policy of the State is to collect unpaid real estate taxes by levy upon the personalty of the owner, when that is permitted by section 71 of the Tax Law (Consol.Laws, ch. 60), or by a sale of the property. Tax Law, arts. 6 and 7, s 119 et seq. and s 150 et seq.

We are not here concerned with the sale of tax liens upon the property of the owner. Such a sale is permitted only when the Legislature grants such power in express terms. That was pointed out in County Securities, Inc., v. Seacord, 278 N.Y. 34, 39, 15 N.E.2d 179, 181, where it was said: ‘The general Tax Law of the State provides for the sale of the property in the enforcement of tax liens. Tax Law, art. 7, s 150 et seq. That law applies in all cases except where the Legislature by express language has provided a different method to be employed in certain subdivisions of the State.’ No such grant of power has been made to the city of Buffalo or the county of Erie.

As further evidencing the general policy of the State, we find that section 50, subdivision 2, of the Tax Law provides as follows: ‘The board of supervisors in any county of the state shall when examining the assessment-rolls of the several tax districts of the county, as above provided, exclude from the tax rolls of said districts, to be prepared by said board, such parcels of real property as have been struck down to the county at a tax sale and not redeemed as provided in section one hundred and fifty-two of this chapter. The county treasurer shall annually between the date of the tax sale and the first day of December next succeeding, prepare and submit to the board of supervisors a list of all such lands so struck down to the county in any year and still remaining unredeemed. No such properties shall be so excluded from said tax rolls except by a resolution of said board adopted at an annual meeting by a vote of a majority of the members thereof. Whenever such real property is so excluded from the tax rolls by the board, the total of the assessed valuations of the real estate of the several tax districts, as the same appear on the completed tax rolls, shall be the aggregate valuation of the taxable real estate in the county.’

A tax district means, ‘unless otherwise herein provided a city or town of this state.’ Tax Law, s 2, subd. 4.

Section 153 of the Tax Law provides: ‘s 153. Redemption of real property stricken from tax-rolls. The real property struck down to a county at said tax sale and omitted from the tax-rolls as provided in section fifty of the chapter shall not be subject to further sale after having been once so sold for taxes. The real property so omitted from the tax-rolls may be redeemed by the owner, occupant or any other person, provided the county has not acquired a title in fee to such real property, upon the payment to the county treasurer for the use and benefit of the county of a sum equal to the gross amount of the taxes, expenses of such sale, penalty and interest thereon, together with the tax and interest thereon which would have been due on said real property had it been taxed during each of the years it was so omitted from the taxrolls. The said taxes for each of the years during which said real estate is so omitted from the tax-rolls shall be computed on the basis of the assessed valuations returned on said real property by the assessors of the several tax districts and at the rate fixed by the board of supervisors as the tax rate for...