trustee on January 6, 1909, by an order of the Supreme Court, and admits that by reason of the death of Charles Stockton Halsted and pursuant to the provisions of the will of Catherine Crane Halsted the trust fund held by it as trustee is now distributable. No objection, either in this accounting or the other, is filed as to any of the items of the accounts, and it appears that each account contains a correct statement of the receipts and expenditures. The Union Trust Company is entitled to have the trust fund of $25,000, which now belongs to the executor of Charles Stockton Halsted, paid first to it as substituted trustee under the will of Catherine Crane Halsted, and by it paid over to the estate of Charles Stockton Halsted, so as to obtain its commission on the fund. But the executor in his brief states that the counsel for the trust company in open court announced his willingness to have the fund paid directly to the estate of Charles Stockton Halsted. If this be so, I see no reason why the decree in the estate of William A. Halsted should not provide for the payment of the fund directly to the estate of Charles Stockton Halsted. But I believe that the consent in writing of the Union Trust Company should be filed. The above-named decedent also leaves an individual estate, but no objection is filed to the account as to this. The only objection is as to the $25,000 trust fund. Decreed accordingly. (77 Misc. Rep. 54.) In re SAUNDERS' ESTATE. (Surrogate's Court, Westchester County. May, 1912.) 1. TAXATION (§ 876*)-TRANSFER OF TAXES CORPORATION." EXEMPTIONS"EDUCATIONAL A devise of a residuary estate to the city of Yonkers, in trust, to found a trades school under the direction of the board of education and as a part of the school system, providing that all payments and investments of the fund are to be under direction of the board of education, is a devise to an educational corporation within Tax Law (Consol. Laws 1909. c. 60) § 220, and is not subject to a transfer tax. [Ed. Note. For other cases, see Taxation, Cent. Dig. §§ 1693-1699; Dec. Dig. § 876.* For other definitions, see Words and Phrases, vol. 3, p. 2317.] 2. TAXATION (§ 860*)-TRANSFER OF TAXES-EXEMPTIONS. In cases referring to a transfer tax, the burden of proving a clear legislative intention to tax the property rests upon the comptroller. [Ed. Note. For other cases, see Taxation, Cent. Dig. § 1675; Dec. Dig. § 860.*] 3. TAXATION (§ 876*)-TRANSFER OF TAXES-EXEMPTIONS. A bequest of money to a city public library is subject to a transfer tax. [Ed. Note.-For other cases, see Taxation, Cent. Dig. §§ 1693-1699; Dec. Dig. § 876.*] 4. TAXATION (8 876*)-TRANSFER OF TAXES-EXEMPTIONS. A bequest of money to a county society for the prevention of cruelty to children is subject to a transfer tax. [Ed. Note. For other cases, see Taxation, Cent. Dig. §§ 1693-1699; Dec. Dig. § 876.*] For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes 5. TAXATION (§ 876*)-TRANSFER OF TAXES-EXEMPTIONS. Where a testator who had no immediate family, but left an estate of over a million dollars, after directing that he be laid in the family cemetery lot owned by him and his two brothers, provides for changes being made in the lot with their consent and the erection of a granite block therein at an expense of not to exceed $5,000, and it is their intention to substantially expend that sum in making the improvement, the testator's executors were entitled to an exemption of one-third of that sum in fixing the transfer tax. [Ed. Note. For other cases, see Taxation, Cent. Dig. §§ 1693–1699; Dec. Dig. § 876.*] 6. EXECUTORS AND ADMINISTRATORS (§ 498*)-COMPENSATION-COMMISSIONS. Where a will directed that real estate be converted into personalty, the executor's commissions should be figured accordingly; and, where the personal estate as found by the tax appraiser is valued at $586,000 and the real estate at $487,000, each executor is entitled to full compensation. [Ed. Note. For other cases, see Executors and Administrators, Cent. Dig. §§ 2125-2129; Dec. Dig. § 498.*] 7. EXECUTORS AND ADMINISTRATORS (§ 109*)-AccOUNTING-BROKER'S COM MISSION. Executors are entitled to have allowed as an expense necessarily incurred and to be incurred in disposing of real estate a broker's commission of 22 per cent. on the appraised value after deducting the commission on a sale on which no commission was paid. [Ed. Note. For other cases, see Executors and Administrators, Cent. Dig. 88 435-438, 440-447, 763; Dec. Dig. § 109.*] Appeal from Report of Transfer Tax Appraiser. Transfer tax appraisal of the estate of Ervin Saunders, deceased, under the acts in relation to taxable transfers of property. From the report of the appraiser, the city of Yonkers and others appeal. Modified. William A. Moore, of New York City, for state comptroller. Remsen & Parsons, for Farmers' Loan & Trust Co., executor. Charles E. Otis, of New York City, for the Yonkers Public Library. Lincoln G. Backus, for Westchester County Society for Prevention of Cruelty to Children. MILLARD, S. Ervin Saunders died in the city of Yonkers on the 17th of February, 1909, leaving a last will and testament under and by virtue of the provisions of which Leslie M. Saunders of the city of Yonkers, and the Farmers' Loan and Trust Company, of the city of New York, were appointed executors. A petition. was duly presented, and thereupon an order was entered sending this proceeding to the transfer tax appraiser, who first filed a report on the 4th of April, 1910, and thereafter an order was entered sending the same back to him for further consideration, and a new report, from which the appeals in this matter have been taken, was made and filed on the 28th of May, 1910. ⚫For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes By this report it appears that the testator's estate was appraised at the sum of $1,074,595.75, of which $586,621.92 was personal property and $487,973.83 was real estate. From this the appraiser deducted the sum of $38,287.48 for debts and expenses of administration, leaving the total estate transferred as per the appraiser's report $1,036,308.27. All of this large sum, with the exception of $59,189.50, is bequeathed for charitable purposes in the city of Yonkers. Four hundred and fifty thousand dollars was bequeathed to the Yonkers Homeopathic Hospital and Maternity Home, but, as the appraiser exempted this bequest from taxation, no appeal has been taken therefrom. From the order entered on the report of the appraiser as to all other charitable bequests, as well as certain other matters, four separate and distinct appeals have been taken, and, as I think it best that each one be considered separately, I will, at this point in my memorandum, incorporate a statement as to each one of the appeals and then discuss them in their order. First. After certain other bequests, all the rest, residue, and remainder of his estate, which was appraised at the sum of $427,118.77, was bequeathed to the city of Yonkers for the purpose of founding the Saunders Trade School. This is taxed in the appraiser's report at 5 per cent. and an appeal is taken by the city of Yonkers, as well as the executors, from this portion of the order. Second. Fifty thousand dollars were bequeathed to the Yonkers Public Library. This was taxed at 5 per cent. in the appraiser's report and order entered thereon, and from this the trustees of the library and the executors appealed. Third. Fifty thousand dollars was bequeathed to the Westchester County Society for the Prevention of Cruelty to Children. This was taxed in the appraiser's report at 5 per cent. and from the order made thereon the executors and the officers of the society appealed. Fourth. The executors also appeal from the following parts of the order entered upon the appraiser's report: (a) The failure to allow $5,000 as provided in the first paragraph of the will for the improvement of the plot in St. John's Cemetery of the city of Yonkers. (b) The refusal to allow $22,000 for executors' commissions in place of $10,778.50, amount allowed by appraiser. (c) Because of the failure to allow $12,000, the sum which is claimed must be necessarily paid for commissions on sale of the real estate of the said testator. [1] The bequest for the Saunders Trade School is made in the eighth paragraph of the will and was subject to certain conditions, which need not be considered at this time, because all of them had been fulfilled before the matter came before me. Without giving in detail the provisions, an examination of the will shows that the residue of the estate is bequeathed to the city of Yonkers, in trust, to found and maintain a trades school under the direction of the board of education and as a part of the public school system for the teaching of mechanical trades and practical and scientific knowledge connected therewith, to such persons as wish to learn a trade by which to earn their living particularly; that restrictions as to subjects taught may be modified from time to time by the board of education, who also are given the power to invest the fund herein bequeathed and to keep the same invested and to collect and receive the income and apply the same, including a portion of the principal, if necessary, for the construction and maintenance of said school. A reading in detail of said section shows that all payments and investments are under the direction or in the discretion of the board of education. It is claimed by the State Comptroller that the appraiser's report is right, and that this bequest is taxable, being made to the city of Yonkers, which is not a corporation entitled to exemption, and on behalf of the executors and the city of Yonkers, it is claimed that the report is erroneous because it is a bequest to an educational and charitable corporation and exempt under the law. Section 220 of the Tax Law, relating particularly to taxable transfers, provides for a tax upon real and personal property as set forth in said paragraph, and section 221 sets forth certain exceptions and limitations upon the provisions of the former section and among other things contains this provision: "But any property devised or bequeathed 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 exempt from and not subject to the provisions of this article." If, therefore, this bequest to the city of Yonkers can be considered a bequest to a corporation of this kind, which the state comptroller claims is impossible, the legacy will not be subject to any tax. If some resident of the village of Tarrytown, desiring to provide. for the school of his native place, should have bequeathed to the board of education of school district No. 1 of the town of Greenburgh, which is the Tarrytown district, a sum of money to be used for the purpose of establishing in that district a trades school, I do not believe that any claim would be made on the part of the comptroller that such a bequest was taxable, and his argument in this case is based entirely upon the fact that this bequest is made to the city of Yonkers, which he claims is not an educational or charitable corporation in its strict sense but merely a municipal corporation, and I would agree with him if the bequest was to the city of Yonkers of the residue of the estate, without any further provision as to what was to be done with it. An examination of the statutes shows that by chapter 397 of the Laws of 1881 all the school districts in the city of Yonkers were consolidated and made one school district; that having become a second-class city on the 1st of January, 1908, it became subject to the charter relating to second-class cities, and was so affected until its local city charter went into effect on the 21st of May, 1908, which is known as chapter 452 of the Laws of 1908; that article 9 of said charter refers to its department of public education, and by section 1 of that article it is provided: "The title of the school houses, sites, lots, furniture, books, apparatus, appurtenances, and all other school property connected with or constituting part of the public school system of the city of Yonkers shall be vested in the city of Yonkers. The city may in its corporate capacity take and hold any personal or real property transferred to it by grant, gift, devise or bequest, in trust, for the benefit of the schools of the city, or any of them, whether said property be transferred in terms to said city by its corporate name or by any other designation, or to any person or body for the benefit of said schools or any of them. "Sec. 2. The head of the department of public education shall be the board of education which shall be composed of fifteen trustees, residents of the city." Thereafter in the different sections the powers of the board of education are clearly set forth, and show that they have the sole management and control of all the educational matters connected with said city, and in subdivision 4 of section 6 the power to establish industrial schools is distinctly provided for. The papers before me show that the city of Yonkers spends annually nearly $400,000 for the benefit of 25,000 children in maintaining 21 schools and 325 teachers. The fact, as is shown above, that all these schools were consolidated into one district, which is under the sole management and control of the board of education, to my mind makes it plain that this is a parallel case to the one cited above, and that any resident of the city of Yonkers desiring to make a bequest for the benefit of the schools of that city, being thoroughly familiar with the law above quoted, that the title of all the property should be vested in the city of Yonkers, would have made it exactly as Mr. Saunders did. His bequest is not made to the city of Yonkers to do with as its officers please, but is made to the city of Yonkers, in trust to do certain things under the direction and in the discretion of the board of education, and neither the principal of the fund nor its income can be used in any way except for the purposes of education, and, as the law provides that the property shall be vested in the city of Yonkers, it certainly must be a proper bequest for educational purposes when it is made directly to it with the provisions, conditions, and restrictions as in 'said will set forth. [2] It is a well-settled principle of law that, in cases referring to a transfer tax, the burden of proving a clear legislative intention to tax the property rests upon the comptroller, and in arriving at a conclusion I am impressed with the correctness and justice of the statement of the court in Matter of Mergentime, 129 App. Div. 367, 113 N. Y. Supp. 948: "That the state should attempt to tax the contributions to this corporation, to be used in supplying the deficiencies in the expense of its maintenance over and above that contributed by the city for the institution, which is so largely maintained by the city for the benefit of citizens and the rest of the people of the state, is certainly surprising, and no such intention should be inferred except upon the clearest evidence." |