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time, a decree or order of his court; or to grant a new trial or a new hearing for fraud, newly discovered evidence, clerical error, or other sufficient cause. The powers conferred by this subdivision must be exercised only in a like case and in the same manner as a court of record and of general jurisdiction exercises the same powers.” Without doubt the remedy to correct legal errors is by appeal as provided in the tax law (Laws 1896, p. 875, C. 908, § 232) applicable to transfer taxes, which limits the time to 60 days from the fixing of the tax; but I do not think the proceeding here to review the assessment is based purely upon legal errors. There is no time limit upon a Surrogate's Court to vacate or modify its decree in a proper case, provided it be exercised in a like case and in the same manner as a court of record. There is nothing in the section quoted above which limits the time in which an application of this character may be presented. It is only by reading section 1290 in connection with section 2481, subd. 6, that any limitation of time could be placed upon the surrogate's decrees. Section 1290 provides :

“A motion to set aside a final judgment, for error in fact, not arising upon the trial, shall not be heard, except as specified in the next section after the expiration of two years since the filing of the judgment roll."

It was expressly held in Matter of Henderson, 157 N. Y. 423, 52 N. E. 183, that the two years limitation did not apply to the Surrogate's Court, and in construing a portion of subdivision 6, above referred to, the opinion states:

A like case' means that the party making the motion must show the existence of the error or mistake in the same way as if the record was in the other court; and

by 'the same manner all that is meant is that the surrogate shall proceed in the same way to hear the application. Proof must be made, notice given, and a judicial hearing of the parties had, but there is no more limit as to the time within which the application may be entertained since the enactment of the statute than there was before. There certainly is no express limitation of time upon the power of the surrogate contained in the statute, and it is impossible to show by any correct reasoning process that one is implied.”

In addition to Matter of Henderson, supra, it was held in Matter of Flynn, 136 N. Y. 287, 32 N. E. 767; Matter of Coogan, 27 Misc. Rep. 563, 59 N. Y. Supp. 111; Morgan v. Cowie, 49 App. Div. 612, 63 N. Y. Supp. 608; Matter of Sherar, 25 Misc. Rep. 138, 54 N. Y. Supp. 930; Matter of Scrimgeour, 80 App. Div. 388, 80 N. Y. Supp. 636,that the surrogate has the power to entertain a proper application after the time to appeal has expired, or after two years have elapsed since the entry of the order.

These applications are within the section of the Code, and the Surrogate's Court has power to consider them and determine what is proper in the premises.

The merits of this case, however, do not warrant a modification of -the order wherein it is sought to modify or strike from the order the sum which was paid by Mather upon his life estate in said Arcade property. He knew that said property belonged to him when he testified before the appraiser that Joshua Mather owned it at the time of his death. The deed was in his own handwriting, and had been in his possession for about four years, and a like space of time elapsed after the payment of the tax before his death. It had beer

and 118 New York State Reporter the subject of some conversation among certain members of his family, and the matter was referred to in the presence of others. The transfer of property of the value of $175,000 and the payment of a tax of nearly $5,000 were not such ordinary events that one could forget that he was the owner of the property, or was not liable to pay the tax thereon. For some reason, undisclosed in the record, he chose to penalize himself. Had he testified as to the true ownership of the property, no tax could have been imposed upon him as far as this property is concerned; but he preferred to give testimony which he knew would result in the imposition of the tax in question. Facts existed outside of the record, which were within his knowledge, that would have rendered any tax void. He knew the real condition. It was not unlawfully imposed or collected, but was voluntarily paid by him. The circumstances do not warrant the conclusion that he made a mistake, and upon the facts in this case his representatives cannot recover it.

In Tripler v. Mayor, 125 N. Y. 627, 26 N. E. 723, the court said: "But one against whom a judgment is rendered, or upon whose land an assessment is laid, apparently valid, although in truth utterly void by reason of facts outside of the record, who pays it with full knowledge of those facts, and without the slightest attempt to enforce payment of either the judgment or assessment, cannot, in any just view of the case, be regarded as making an involuntary payment by coercion in law."

In Vanderbeck v. City of Rochester, 122 N. Y. 285, 25 N. E. 408, it was held that "a voluntary payment of an assessment, made under a mistake of law, but with full knowledge of the facts, and not induced by any fraud or improper conduct on the part of the payee, cannot be recalled.” I think this rule should be applied to those who represent Charles W. Mather. There was no fraud or coercion on the part of the state. In my judgment, the case here presented is clearly distinguishable from those referred to by counsel for petitioner. The application, as far as modifying the order so as to strike therefrom the amount paid by Mather, should be denied.

A different condition, however, presents itself as to that part of the order which suspended the tax upon the real property in question. Upon the evidence of Mather, the appraiser in the performance of his duty properly held that under the will of Joshua Mather there was a suspended tax, and those of Charles W. Mather's heirs who should pay the same could only be determined upon his death. It is apparent, however, that his children succeeded to said property, not as devisees under the will of Joshua Mather, but by reason of being heirs of the grantee in the deed above referred to. There was no taxable transfer to theni. Clearly, no tax could have been assessed against them or suspended until the happening of a future event as to property which their father owned. The order as to that was illegal and void, and the same should be modified by striking therefrom any provision as to the suspended tax upon said property, or as to the value of said property as far as it affects any heir at law of Charles W. Mather.

An order in accordance with the foregoing may therefore be entered.

Decreed accordingly.

(41 Misc. Rep. 470.)

In re DEMERS' ESTATE,

(Surrogate's Court, Rensselaer County. October, 1903.) 1 TRANSFER Tax-PROPERTY SUBJECT.

In 1901 a judgment of the Supreme Court awarded the natural child of an intestate dying in 1900 specific performance of a contract made by intestate with her mother in 1862, by the terms of which, on the surrender of the daughter to him, his property remaining at his death was to go to the daughter. Held, that the property was not subject to the transfer tax, as it was neither acquired under a will, nor by the intestate laws, nor by sale or gift made in contemplation of death, or to take effect in use or enjoyment thereafter. In the matter of the appraisal of the transfer tax on the estate of John Demers, deceased. From an order assessing the tax, the executor appeals. Reversed.

Shaw, Bailey & Murphy, for appellant.
Jarvis P. O'Brien, for State Comptroller.

HEATON, S. This is an appeal from an order assessing a transfer tax against Eugenie Demers Drouin on $12,413.15 at i per cent. John Demers died intestate February 28, 1900, leaving him surviving a brother and sister and numerous nephews and nieces, being heirs at law and next of kin and also one Eugenie Demers Drouin, a natural daughter of said deceased. He left both real and personal estate. About the 20th day of June, 1900, said Drouin began an action in the Supreme Court against all of such heirs at law and next of kin, and against the administrators of the estate of said Demers, and alleged that she was the daughter of said Demers, and was born about the year 1861, and that in the year 1862 said Demers entered into an agreement with the mother of the plaintiff that if such child was sur. rendered to him, and he had the entire and unmolested charge of her, upon his death the property he should have should belong to such child. On the 16th day of March, 1901, a judgment was granted by the Supreme Court awarding the plaintiff a specific performance of such contract, and adjudging that she was entitled to all the property, real and personal, of the deceased, and directing a transfer and conveyance of the same to her by the administrators and by the heirs at law, “subject only to the due course of administration and the payment of the just debts of John Demers, deceased.” On the inth day of May, 1900, an order was made appointing an appraiser to assess the real and personal estate of such deceased which passed to his heirs at law and next of kin; and on the 11th day of July, 1902, an order was made assessing a tax on the same against Eugenie Demers Drouin of $124.31, from which this appeal is taken.

The appraiser has apparently assessed a tax against Mrs. Drouin on the ground that the judgment of the Supreme Court has adjudged her to be the only heir at law and next of kin of the deceased, and, as the personal estate has been found to be over $10,000, he has levied a tax at i per cent. The appellant claims that the judgment of the Supreme Court has established a contract in the nature of a debt of deceased in favor of Mrs. Drouin, and that for that reason no part of

and 118 New York State Reporter the estate awarded to her by such judgment is taxable. The statute provides for the taxation of the transfer of property in certain cases by will, by the intestate laws, and by bargain and sale or gift made in contemplation of death, or to take effect in use and enjoyment after death. This transfer was not by will, and was not testamentary in character, within the meaning of the transfer tax act. Johnston v. Spicer, 107 N. Y. 185-195, 13 N. E. 753. The deceased died intestate, but there was no transfer to Mrs. Drouin under the intestate laws, as she was not next of kin to the deceased. No doubt, the legal title to the property of the deceased did pass by the intestate laws to his next of kin; but such holding by them was in trust for the equitable owner, Mrs. Drouin, and was a mere naked title, not coupled with a beneficial interest, and such transfer would not be taxable under the act in question. Johnston v. Spicer, 107 N. Y. 185, 13 N. E. 753. From the date of the death of Demers to the date of the judgment of the Supreme Court, Mrs. Drouin was the equitable owner of the property of the deceased, and upon the rendition of such judgment she was the legal owner of such property, and the same passed to her, not by will or by the intestate laws, but by virtue of the contract obligation which Demers entered into for a valuable consideration in 1862. This transfer was not by gift, since the Supreme Court has declared the contract to have had a valuable consideration, but was through a contract of bargain and sale. Such contract made in 1862 was not in contemplation of death. Matter of Spalding (Sup.) 63 N. Y. Supp. 694; Matter of Baker, 83 App. Div. 530, 82 N. Y. Supp. 390. It clearly was intended to become operative upon the death of Mr. Demers, and to vest in beneficial use and enjoyment at his death. But since there was no gift of the property, and the contract and obligation was made upon a valuable consideration long before the passage of the transfer tax act, the transfer or succession is not reached for the purpose of taxation by subdivisions 3 and 4 of section 220 of the act (Heydecker's Gen. Laws, p. 1931, c. 24). Matter of Seaman, 147 N. Y. 69, 41 N. E. 401 ; Matter of Gould, 156 N. Y. 423, 51 N. E. 287. There is also some authority for holding that such an obligation by valid contract is a debt of the deceased which should be deducted in ascertaining the clear market value of the estate for the purposes of taxation. Matter of Miller, 77 App. Div. 473-481, 78 N. Y. Supp. 930; Matter of Baker, 83 App. Div. 530, 82 N. Y. Supp. 390; Hegeman v. Moon, 131 N. Y. 462, 30 N. E. 487.

The judgment, in terms, makes the property directed to be conveyed subject to debts and the expenses of administration. The order heretofore made is vacated and set aside.

Order reversed.

(41 Misc. Rep. 420.)

In re THOMPSON et al. (Surrogate's Court, Saratoga County. September, 1903.) 1. ADMINISTRATOR-ASSETS-SHRINKAGE IN VALUE-LIABILITY.

Decedent's estate consisted largely of stocks, and 50 days after the appointment of administrators there was a general decline in the market, and there was no recovery during the following year. Because of prospective loss the administrators did not sell, but applied for a judicial settlement of their accounts. Held, that they were not chargeable with the stocks at their inventory value, but would be made an allowance to

cover the decrease in the estate as not having occurred by their fault. 2. SAME-CONVERSION OF ASSETS.

An administrator, in determining the time for converting the assets of the estate into money for the purpose of distribution, is not controlled by the directions of one of the next of kin, even to the extent of her

share in the estate. 8. SAME-DISTRIBUTION IN KIND.

Where the assets of an estate consist largely of stocks and bonds, a distribution of the assets in kind will be ordered in order to avoid loss

to the next of kin as far as possible. In the matter of the judicial settlement of Caroline B. Thompson, administratrix, and Thomas Kerley, administrator of Frank Thompson, deceased. Decree of distribution rendered.

See 83 N. Y. Supp. 983.
John H. Burke, for administrators.

Goodwin, Thompson & Vanderpoel, for Rhoda Thompson, Edward D. Thompson, and Mary T. De Forest.

Guthrie, Cravath & Henderson, for John W. Thompson, George L. Thompson, and Annie A. Thompson.

James L. Scott and Edgar T. Brackett, for Frances L. McLean.

LESTER, S. The only questions raised by the parties to this proceeding are whether the administrators should be allowed for the depreciation in the value of the stocks and securities constituting the bulk of the estate which has occurred since the estate came into their hands, and since the inventory was made and filed, and whether the decree should direct the delivery of unsold securities to the parties entitled to distribution in lieu of the money value of the property.

Letters of administration were granted on the 20th day of August, 1902. The property and securities constituting the estate came into the possession of the administrators on the gth day of October following. The inventory was completed on the 24th of January, and filed on the 26th day of February, 1903. By the inventory it appears that the assets of the estate amounted to $1,283,409.91. Soon after the 9th of October, 1902, the market value of the securities began to decline, and the progress in this direction continued after the making and filing of the inventory. The administrators claim that under the statute (Code Civ. Proc. § 2729) which provides that administrators shall not sustain any loss by the decrease, without their fault, of any part of the estate, but shall be allowed for such decrease on the set-, tlement of their accounts, an allowance should now be made for the decrease of the estate in their hands. The contestant objects to such an allowance, and claims that the administrators are chargeable with

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