Opinion
November, 1905.
Joseph W. Middlebrook, for the motion.
Frank M. Buck, opposed.
This motion to dismiss an appeal of the State Comptroller from an order made by the surrogate of Westchester county reversing an order assessing a transfer tax must be denied; the State Comptroller has a clear right of appeal in this case. The motion is made upon the grounds that the right to take such appeal does not exist and that this court has not jurisdiction to hear and determine such appeal, the argument being based upon the theory that the power of taxation being vested in the legislative department, all of the acts of the surrogate under the provisions of the Tax Law are ministerial acts within the legislative scope, and that there can, therefore, be no right of appeal.
It is perfectly true, of course, that the power of taxation is one which belongs to the legislative department, and it is equally true that some of the functions of a taxing officer are ministerial, but it is well established by authority that in determining the value of the property assessed, the extent of claims to exemption, etc., the taxing officer or board acts judicially. ( McLean v. Jephson, 123 N.Y. 142, 149, and authority there cited; Stanley v. Supervisors of Albany, 121 U.S. 535, 550; City of New York v. McLean, 170 N.Y. 374, 383, and authorities there cited.) To the extent that the surrogate acts judicially in determining the amount of tax to be imposed upon the privilege of receiving transfers of property there can be no doubt that there is a right of appeal, according to the theory of the learned counsel for the relator, and it must be presumed, upon this motion, that the appeal relates to the judicial acts of the surrogate. This would be true upon principle, but it has been judicially held that under the provisions of section 2570 of the Code of Civil Procedure an appeal of this very kind might be taken to the Appellate Division of the Supreme Court. In Morgan v. Warner ( 45 App. Div. 424) the question was fairly raised that the court was not authorized to entertain the appeal, it being urged that a different mode had been provided. The court, after reviewing the question, say: "But this appeal need not necessarily rest upon that single statute. If other statutes exist which are applicable thereto they must be read in connection with the statutes, they together prescribing the mode of determination of this tax and also the mode of review. By section 2570 of the Code of Civil Procedure it is provided: `An appeal to the Appellate Division of the Supreme Court may be taken from a decree of the Surrogate's Court or from an order affecting a substantial right made by a surrogate or by a Surrogate's Court in a special proceeding.' This proceeding would seem to come within the purview of that section, and the order made by the surrogate from which this appeal is taken, involving, as it does, a substantial right, may be reviewed under this section by the Appellate Division." This view of the question was adopted by the Court of Appeals, which affirmed on the opinion of the court below. ( Morgan v. Warner, 162 N.Y. 612.)
A transfer tax is a tax upon the privilege of inheritance ( Matter of Vanderbilt, 172 N.Y. 69, 73, 74, and authorities there cited), and the Legislature has, very properly, given jurisdiction to the Surrogate's Court, through which the estates of decedents must pass, to determine the amount of tax to be collected upon the property which is distributed, and it would be strange, indeed, if a power of this kind, affecting the public revenues of the State, as well as the interests of beneficiaries under wills, should be left to the arbitrary power of the Surrogate's Court. The functions delegated to the Surrogate's Court are essentially judicial.
As the question involved in this case arose in the county of Westchester, it is governed by the statutory provisions applicable to that county. The testator died on April 5, 1902. A transfer tax appraiser was appointed by the surrogate of said county on June 2, 1902. Said appraiser reported to the surrogate on February 20, 1905. The transfer tax was assessed and fixed by the surrogate on March 6, 1905, and on March 21, 1905, an appeal was taken to the surrogate. On June 28, 1905, the surrogate reversed his determination fixing and assessing the transfer tax.
Section 229 of the Tax Law (Laws of 1896, chap. 908, as amd. by Laws of 1901, chap. 173) provides that the Surrogate's Court shall have jurisdiction to hear and determine all questions arising under the provisions of article 10 of said statute relating to "Taxable Transfers" and "to do any act in relation thereto authorized by law to be done by a surrogate in other matters or proceedings coming within his jurisdiction." This section of the statute was renumbered as section 228 by chapter 368 of the Laws of 1905, but no change was made in the provisions above quoted.
Section 230 of the Tax Law (as amd. by Laws of 1902, chap. 496) provides for a transfer tax appraiser in the county of Westchester and then provides that the surrogate, as therein prescribed, shall, by order, direct said appraiser "to fix the fair market value of property of persons whose estates shall be subject to the payment of any tax imposed by" article 10 of the statute.
Section 231 of said statute (as amd. by Laws of 1901, chap. 173) provides that after giving the prescribed notice, said appraiser shall appraise the property transferred at its fair market value and make a report thereof and of such value in writing to the surrogate.
Section 232 of the Tax Law (as amd. by Laws of 1901, chap. 173) provides that "from such report and other proof relating to any such estate before the surrogate, the surrogate shall forthwith, as of course, determine the cash value of all estates and the amount of tax to which the same are liable; or the surrogate may so determine the cash value of all such estates and the amount of tax to which the same are liable without appointing an appraiser."
The section further provides for an appeal therefrom by the Comptroller of the State of New York or any dissatisfied person to the surrogate within sixty days from the fixing, assessing and determination of the tax by the surrogate.
The first provision of this section above quoted was substantially transferred to section 231 of the statute and the latter provision thereof was continued in said section 232 by chapter 368 of the Laws of 1905, which took effect on June 1, 1905.
That is, the estate of the decedent stands charged with the tax which is to be paid presently. ( Matter of Vanderbilt, supra, 74.) It is a condition upon which the State permits the acquisition of property by devise or descent that this tax shall be paid out of the property which is to be acquired ( Matter of Vanderbilt, supra), and this naturally falls within the jurisdiction of the Surrogate's Court, which is charged with the duty of watching over the administration of the estates of deceased persons. It is a special proceeding in connection with the lawful devolution of property under our statutes, where the Comptroller, representing the People of the State, appears as a necessary party ( Matter of Arnett, 49 Hun, 599), and the provisions of section 2570 of the Code of Civil Procedure are directly applicable. ( Morgan v. Warner, supra.)
The motion to dismiss the appeal in this matter should be denied, with costs.
BARTLETT, RICH and MILLER, JJ., concurred.
Motion to dismiss appeal denied, with ten dollars costs.