Von Echt's Estate, In re

• Decision Date: 28 May 1963
• Citation: 39 Misc.2d 373,240 N.Y.S.2d 703
• Parties: In re ESTATE of Alice B. VON ECHT Surrogate's Court, New York County
• Court: New York Surrogate Court

Page 703

240 N.Y.S.2d 703

39 Misc.2d 373

In re ESTATE of Alice B. VON ECHT

Surrogate's Court, New York County.

May 28, 1963.

Katz, Wittenberg & Katz, New York City (Samuel Schacter and Homer I. Harris, New York City, of counsel), for objectants and cross-petitioners, Werner Bachofen von Echt, Johanna Bachofen von Echt, Marie Helene von Skene and Geo. Bernhard von Echt.

Soons & Soons, New York City (Paul A. Wallace, New York City, of counsel), for executors.

Louis J. Lefkowitz, Atty. Gen. (Dean G. Braslow, Deputy Asst. Atty. Gen., of counsel), for charitable beneficiaries.

Donald T. Mullane, New York City, special guardian for Johann Frederick Bachofen von Echt and Richard Skene, infants.

Harry Edwards, New York City, for National Lutheran Council, a residuary legatee.

S. SAMUEL DI FALCO, Surrogate.

The executors and the representatives of a deceased executor have filed their intermediate account. Decedent died on May 20, 1959. Her will dated April 15, 1954 and a codicil dated April 28, 1955 were admitted to probate on June 12, 1959. In her will the testatrix, after bequeathing certain general and specific legacies and establishing two general trusts, directed that her residuary estate be divided into two equal parts. One such part she gave to Werner B. Von Echt, a nephew of her deceased husband, or if he predeceased the testatrix, then to his surviving issue and in default of such issue to the American National Red Cross. The other part of the residuary estate she gave to 'such churches and or charitable corporations' selected by the individual executor or his successor to carry out a stated charitable purpose. In the codicil the testatrix revoked the outright gift of one-half of her residuary estate to Werner B. Von Echt and instead placed that share in trust for his benefit for life with the remainder to his surviving issue, and in default of such issue, to the American National Red Cross. The codicil did not change the gift of the other half of the residue for charitable purposes.

Testatrix directed in paragraph Sixteenth of her will that 'all transfer, inheritance, estate or other death taxes (both State and Federal) on any bequest or devise passing under this, my Will, and any codicil thereto, shall be paid out of my residuary estate.'

The executors show the allocation of the estate taxes in Schedule J of their account. They charge the taxes in the pre-residuary bequests equally against the residuary legatees. The taxes on the residuary shares are charged against the residuary trust solely and not against the portion payable to the charities. The income beneficiary of the residuary trust and two of his children who are contingent remaindermen thereof have filed objections to the proposed allocation of estate taxes upon the ground that it is not in accordance with the direction contained in decedent's will. They have also submitted a cross petition for a construction of paragraph Sixteenth of the will contending that the direction against apportionment of the estate taxes therein indicates that it was the intention of the testatrix 'that there was to be apportionment neither without nor within the residuary estate.'

The executors and the Attorney General appearing for ultimate charitable beneficiaries moved to dismiss the objections and the cross petition upon the ground that it appears on the face of the cross petition that it does not state facts sufficient to constitute a cause of action. The special guardian for two infants who are contingent remaindermen of the residuary trust joined in the motions. The movants contend that the proposed apportionment of estate taxes is in accordance with the holding in Matter of Shubert's Will, 10 N.Y.2d 461, 225 N.Y.S.2d 13, 180 N.E.2d 410, which is controlling.

The objectants attacked the motions initially on a procedural question. They argued that the motions are in the nature of applications for summary judgment which are rarely granted in the Surrogate's Court and not in an action for a declaratory judgment to which they compare this application for construction.

The objectants argued that Matter of Shubert's Will (supra) is inapplicable because the tax clause therein is extrinsically dissimilar to that involved herein. Their position is that all Federal, State and foreign taxes should be paid out of the residuary estate as administration expenses, and that after payment of all taxes, the residuary estate, then remaining, should be equally distributed among the residuary legatees. The objectants also raised the question whether or not the Austrian inheritance tax upon the bequest given to and in trust for Werner B. Von Echt is payable out of the residuary estate.

The tax clause interpreted in Matter of Shubert's Will (supra) was 'I direct that all estate, inheritance, succession, transfer or similar taxes on my estate passing under this WILL shall be paid out of my residuary estate'. The objectants drew a distinction between the words 'on my estate' used in the Shubert will and the words 'on any bequest or devise' contained in the tax clause of this will. They argued that the latter clause has never been subject to judicial scrutiny. The objectants also contended that a granting of these motions will deprive them of the opportunity of producing extrinsic evidence based upon the draftsman's record.

A hearing was held so as to afford the objectants an opportunity to present evidence. The objectants offered testimony taken on the examination before trial of William R. Soons, the son and partner of Sydney G. Soons, the draftsman of the will (now deceased); a typewritten copy of a 1950 will of the decedent on which appears pencilled notations and changes in the handwriting of decedent or Sydney G. Soons; a letter dated March 24, 1954 from Sydney G. Soons to the decedent with an attached memorandum dated April 1, 1954; and longhand notes of Sydney G. Soons made after his conference with the decedent. Objections to the admission of these documents into evidence were made. They were received subject to a ruling on their admissibility.

It has been held that extrinsic evidence based on the scrivener's recollection of the circumstances surrounding the execution of the will is inadmissible (Matter of Braun's Estate, 36 Misc.2d 692, 233 N.Y.S.2d 398; Matter of Wise's Estate, 37 Misc.2d 403, 235 N.Y.S.2d 633). Even if the proffered evidence were admissible, there is nothing contained therein which would change the language used in the will. The court determines that the evidence offered by the objectants is inadmissible to show a direction against apportionment (Matter of James' Estate, 199 Misc. 44, 98 N.Y.S.2d 341, affd. 278 App.Div. 648, 103 N.Y.S.2d 124, leave to appeal denied in 302 N.Y. 949, 100 N.E.2d 196; Matter of Aldrich's Will, 259 App.Div. 162, 18 N.Y.S.2d 420; In re Merrill's Estate, Sur., 67 N.Y.S.2d 324).

Section 124 of the Decedent Estate Law requires apportionment of Federal and State estate taxes among the legatees and devisees, 'in the proportion that the value of the property or interest received by each such person benefited bears to the total value of the property and interest received by all persons benefited' except where the testator otherwise directs in his will. The section further provides that 'any exemption or deduction allowed under the law imposing the tax * * * by reason of the charitable purposes of the gift shall inure to the benefit of the person * * * receiving such * * * charitable gift'.

In Matter of Mills' Estate, 189 Misc. 136, 64 N.Y.S.2d 105, the purpose of section 124 of the Decedent Estate Law was considered. The court there stated (189 Misc. p. 142, 64 N.Y.S.2d p. 110):

'Its terms should be applied in their plain meaning. The question of allocation should not be approached as would a construction question where at all events the meaning of the text must be determined from the content of the will. In a tax allocation problem the text of the will is to be scanned only to see if there is clear direction not to apportion; and if such explicit direction is not found, construction of text ceases because the statute states the rule.'

Surrogate Delehanty also observed (789 Misc. p. 141, 64 N.Y.S.2d p. 109):

'What the statute requires is certainty of expression. It is not enough that there be speculation as to what decease may have meant. Those who resist apportionment must be able to point to affirmative language in the will directing that taxes be not apportioned. In case of doubt as to what the will means on the subject of taxes the statutory direction to apportion is absolute.'

In affirming (272 App.Div. 229, 233, 70 N.Y.S.2d 746, 749) the Appellate Division said:

'The legislative history of the statute as well as its language indicates that apportionment is the rule to which exception is allowed only if there be clear direction to the contrary.'

The same court had previously stated in Matter of Halle's Will, 270 App.Div. 619, 623, 61 N.Y.S.2d 694, 697, as follows:

'The matter of intention is to be determined in each case upon a consideration of the language used in the light of the surrounding circumstances.'

The court in Matter of Pepper's Estate, 307 N.Y. 242, 250-251, 120 N.E.2d 807, 811,...