Opinion
July 21, 1964
Morris Pottish for executrix.
Monroe Fink for State Tax Commission.
This is an appeal from the pro forma order fixing the New York estate tax in this estate.
The basis of the appeal is the executrix' objection to the inclusion in the gross estate of the proceeds of three insurance policies totaling $55,834.75. The executrix, in the alternative, contends that if the proceeds are includible in the gross estate, they should qualify for the statutory exemption relating to insurance under section 249-q Tax of the Tax Law.
The decedent was one of five members of a partnership engaged in the practice of public accounting. The partnership agreement of December 1, 1960 fixes the value of a retiring or deceased partner's interest at the then book value of such partner's capital account. In addition, in the case of death, such amount is increased or decreased by profits or losses in the fiscal year of death, less amounts in excess of salary.
While the various insurance policies on the lives of the partners are set out at length in the partnership agreement, including the three here in question, the agreement does not integrate these policies into the buy and sell arrangement by referring to what use, if any, is to be made of the proceeds. Of the three policies in question, one was owned by one of the partners and payable to the decedent's wife as beneficiary. The other two were owned by and payable to the partnership as beneficiary.
Subsequent to the decedent's death, the executrix and the surviving partners entered into an agreement whereby the proceeds of the two policies payable to the partnership were transferred to her in consideration of her assignment to the partners of insurance policies on their lives owned by the decedent. This post-death agreement with the partners recites: "C. The parties desire to proceed with the performance of Said Partnership Agreement in accordance with the provisions thereof and the intentions of the parties thereto."
Although the widow has accordingly received the entire proceeds of the three insurance policies totaling $55,834.75, she claims that the partnership agreement of December 1, 1960 effectively restricts the valuation of the decedent's partnership interest to the sum of $9,186.20, which has been arrived at by use of the method set forth in the partnership agreement.
While not disagreeing with the cases cited by the executrix which tend to support her contention that contracts may effectu-
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[MISSING PAGE] stituted a waiver of any right to require respondents to produce the examination questions and answers. The three questions and answers, which are the subject of this proceeding, are not set forth in the respondents' papers. The petitioners have set forth as much of what they believe the questions and possible answers to have been as they allege they can recall. The respondents state that they will submit the questions and answers to the court for its personal examination.
In their reply to the answer herein, the petitioners assert that furnishing the court the questions in issue along with "pertinent and appropriate comments and affidavits" would be contrary to our system of justice; that respondents might give only their side of the story and that respondents' answer should be stricken because of their failure to set forth the questions.
The procedure suggested by the respondents appears to have been followed in the past (see Matter of Raybin v. New York State Civ. Serv. Comm., 32 Misc.2d 666, 669). Also, the refusal of civil service examiners to publicly divulge the precise questions and answers has been upheld ( Matter of Flynn v. Niesley, 34 Misc.2d 361).
Upon my request, the respondents have furnished me with the three questions and answers as they appeared on the examination; the key answers; the objections of each petitioner to the particular questions and answers to which each objected (only the petitioner Dolan objected to all three questions and answers) when the examination was reviewed on appeal, and the respondents' reasons for the dismissal of the appeals.
The instructions contained in and made a part of the examination read in part: "Each question or incomplete statement is followed by four or five possible answers lettered A, B, C, D, E. For each question, select that answer which is the most acceptable one among those listed" (italics mine). In addition, the instructions stated that the Department of Civil Service reserved the right to determine whether more than one of the answers listed for each question is to be deemed equally acceptable and credited as such, and the right to cancel any question whenever, in its judgment and discretion, it deems that none of the listed alternatives is an acceptable answer.
Thus, the court is called upon to determine first, whether the particular questions under review are susceptible of more than one answer, each of which would be equally acceptable. If they are, then the respondents would be acting arbitrarily in selecting only one as the correct answer ( Matter of Acosta v. Lang, 13 N.Y.2d 1079).
An analysis of these questions reveals that they are not so inadequately or indefinitely framed as to make them incapable of a "most acceptable" answer, nor is the required standard of objectivity destroyed by the reservation of the right by the department to accept more than one answer as correct. The papers and exhibits submitted by petitioners in this proceeding do not establish that the answers given by them are equally acceptable. The respondents are vested with the authority to determine which answer is most acceptable to them, and, absent any showing that petitioners' answers were better, or at least as good as the key answer selected, it cannot be said that the answers selected by respondents were the result of an arbitrary decision. While the court is in agreement with petitioners' contention that they are only required to show that their answers were as good as those selected by respondents, the court cannot agree that respondents no longer have the authority to determine and select the most acceptable answers. To hold otherwise would require the courts to conduct and supervise all civil service examinations whenever some difference of opinion may exist. As stated by DORE, J., in the dissenting opinion in Matter of Blumenthal v. Morton ( 273 App. Div. 497, 503). "The judgment of the court is not to be substituted for the judgment of the commission. If it were, as the facts in this case persuasively indicate, the court in the final analysis would be drawn into preparing, revising and correcting questions in civil service examinations, supervising the examinations, and finally rating the papers. Such duties are not the court's function. As this court said in People ex rel. Caridi v. Creelman ( 150 App. Div. 746, 749): `The court can neither conduct nor supervise civil service examinations'." (See, also, Matter of Gulotta v. Falk, 9 A.D.2d 580; Matter of Cavanagh v. Watson, 201 Misc. 899, affd, 280 App. Div. 757; Matter of Shaughnessy v. Falk, 208 Misc. 788.)
Petitioners have not met the standards specified in Matter of Acosta v. Lang ( 13 N.Y.2d 1079, supra). In my opinion, the respondents exercised their discretion within the constitutional limits of their jurisdiction (N.Y. Const., art. V, § 6). While the power to review administrative action exists and should be exercised in an appropriate case, this is not such a case.
The petition is accordingly dismissed.