Opinion
October, 1920.
Carter, Ledyard Milburn (Heber Smith, of counsel), for executors.
Lafayette B. Gleason (Schuyler C. Carlton, of counsel), for state comptroller.
The application to amend order dated September 26, 1918, fixing transfer tax is granted. Decedent left his entire residuary estate, approximately $260,000, to the town of Bristol, R.I., "for the purpose of erecting a public schoolhouse to be called the Guiteras School Building, in memory of Elizabeth Wardwell Guiteras, my mother." The state comptroller urges that the legatee is not "an educational corporation" within the provisions of section 221 of the Tax Law, and that the transfer is taxable. An examination of that statute, of the provisions of the Education Law and of other statutes, however, convinces me that this transfer should be exempt. There is no statutory definition of an educational corporation. The General Corporation Law is silent as to what corporations come within that designation. The Education Law defines the functions and duties of the regents of the university of the state of New York and of the state education department and confers upon them general management and supervision in educational matters over cities and school districts, public in their nature, and colleges, academies and other private institutions. A board of education is established in each city of the state (art. 33a). The construction urged by the comptroller would make a legacy of this kind exempt if passing to a private college or school, but subject to taxation if passing to a city, town or school district for public school purposes. Can such narrow and discriminatory purpose be attributed to the legislature in the enactment of this section? I think not. The language must be given a broad and comprehensive meaning. The cardinal rule in the interpretation of statutes is to give effect to the intention of the legislative body which enacted them. This intention is primarily to be ascertained from the language used, giving thereto the ordinary meaning. Osborne v. International R. Co., 226 N.Y. 421, 425; People ex rel. Onondaga County Sav. Bank v. Butler, 147 id. 164. There is no more important function of government than education. Our state Constitution requires that the legislature shall provide for the maintenance and support of a system of free common schools, wherein all the children of the state may be educated. Const., art. 9, § 1. To hold that the legislature intended to confine the exemption to private schools would require an inference that it deliberately ignored the constitutional mandate. It would also charge the legislature with ignorance of the provisions of the Education Law (heretofore quoted) passed at its same session in 1909. Legacies for the support of public schools should be encouraged and should not be diminished by deductions for purposes of taxation. The legislature clearly intended that the state should not profit from such gifts, for they relieve the general burden of the expense of education. The language of this section by an amendment made in 1905 was changed by the elimination of the word "exclusively" which characterized the scope of educational and other corporations. Matter of Mergentime, 129 A.D. 367; affd., 195 N.Y. 572. In Matter of Saunders, 77 Misc. 54, an exemption was allowed in the case of a bequest to the city of Yonkers for a trade school. A municipal corporation maintaining a free school system as one of its functions is clearly an educational corporation within the statutory exemption. Neither can this exemption be denied to cities and towns of other states and limited to municipal and other public corporations of this state. The section reads that the exemption shall apply to such corporations "wherever incorporated." Surrogate Slater of Westchester county, in Matter of Burnham, 112 Misc. 560, recently held such transfers were exempt when made to a town situated in Connecticut. The decisions in this county in Matter of Miller, 109 Misc. 267, and Matter of Carpentier, N YL.J., Dec. 24, 1919, have no direct application, as neither related to gifts to educational corporations. It is claimed that the use of the words in section 221 exempting gifts of "real property to municipal corporation in trust for a specific purpose" is an indication of legislative intent to tax gifts other than of real property. This clause, however, must be held to be an additional exemption in favor of such gifts of real property for all public purposes other than "religious, educational, library, charitable" and others enumerated at the beginning of that section of the Tax Law. The construction adopted by me follows the liberal interpretation given to exemptions by the Appellate Division, first department, in Matter of Mergentime, supra, and Matter of Rockefeller, 177 A.D. 786. In the exercise of discretion the original order is amended. Motion granted.
Motion granted.