Opinion
May, 1913.
Frank Hasbrouck, for executors.
John J. Mylod, for state comptroller.
This is an appeal from an order assessing the transfer tax upon the estate of the above named decedent, based upon the report of the appraiser.
He reported that one-half of a bond and mortgage given by one Eugene H. Pool to von Beverhout Thompson and Julia de Windt Thompson, his wife, upon which there was due at the date of the death, July 6, 1912, of said Julia de Windt Thompson for principal and interest, the sum of $30,383.33, was taxable, and also that one-half of a deposit of $12,889.71, in the Union Trust Company of New York, standing in the name of Julia de Windt Thompson at the time of her death, was taxable.
The appellant claims that both of the above items should be stricken out, and exempted from taxation for the reason that both amounts were the proceeds of real estate owned by von Beverhout Thompson, and his wife, as tenants by the entirety, and, in case of the death of either, the survivor became the owner of the whole, and that the said mortgage and money retained the same character by agreement of the parties. Such claim is based upon the fact that certain real estate owned by them in the city of New York, as tenants by the entirety, was sold and conveyed, and a purchase money mortgage for $30,000 taken in their joint names, and a cash payment of $12,750 of the purchase price deposited in the Union Trust Company in decedent's name, solely for the purpose of being re-invested in real estate in the same manner as they held that which they sold.
All the testimony in this matter is in the form of affidavits, filed with the appraiser, and it appears that the only testimony to support the agreement claimed to have been made between Dr. Thompson and his wife was given solely by Dr. Thompson, without corroboration, and in his own interest, and having the effect of defeating the assessment of any tax upon the property in question, and it seems to me that, although his testimony is absolutely true, it is improper and inadmissible in view of his interest in the estate and should not have been received. To accept the sole testimony of a witness directly interested in the result in proceedings of this character would absolutely nullify the transfer tax law, and open the door for the prevention of the imposition of any tax in all similar cases. Such evidence would be inadmissible in any court, against the estate of a deceased person, relative to any agreement, transaction or understanding between the witness and such deceased person, affecting the disposition of the estate or the interest of the witness therein, and such rule should be applied in proceedings of this kind.
The transfer tax law and the decisions thereunder are fully discussed in Matter of Durfee, 79 Misc. 655, and I fully concur with the conclusions in that case, and it would be needless for me to enlarge upon the questions there determined.
When Dr. Thompson and his wife, being tenants by the entirety, conveyed the New York real estate, and accepted part cash and a purchase money mortgage for the balance, made payable to both, the tenancy by the entirety was ended, and he, as survivor, was not entitled to the whole proceeds on her death, without legal evidence of agreement or gift. Matter of Baum, 121 A.D. 496; Matter of Albrecht, 136 N.Y. 91.
As there is no evidence such as the law and established rules of practice require of either agreement or gift, it follows that, upon the death of Mrs. Thompson, Dr. Thompson, her husband, became entitled to the sole possession of one-half of the mortgage above mentioned, and it appearing from the testimony of the witness Taylor that the $12,750 was money received from the sale of said real estate and was paid to Dr. Thompson and his wife by check made in their joint names, he, upon her death, became entitled to the possession of one-half thereof, the remaining half of said two funds passing into the estate of said decedent as personal property, subject to taxation under the provisions of the taxable transfer act; therefore the determination of the appraiser was correct, and must be affirmed. Let an order to that effect be entered.
Order affirmed.