Opinion
June 16, 1955.
Appeal from Supreme Court, Albany County.
Present — Foster, P.J., Bergan, Coon, Halpern and Zeller, JJ.
This controversy involves only the payment of interest. It is conceded that petitioners are entitled to a refund of the transfer tax which amounted to an overpayment. Jacob Peters died a resident of Onondaga County on August 16, 1922, leaving a last will and testament which was duly admitted to probate. His will provided for a life estate in his wife as to certain of his property, with a contingent remainder so that the ultimate devisee could not be known until the wife's death. Pursuant to section 230 Tax of the Tax Law, in effect at the time of decedent's death, the Surrogate made an order on June 6, 1928, temporarily taxing this contingent interest against decedent's executor at the highest rate which might become applicable under any contingency. The executor did not apply, as he might have done under section 241 Tax of the Tax Law in force at the date of decedent's death, for an order fixing the lowest possible tax on said remainder, and directing a deposit by the Comptroller in a bank for the account of the estate. It is well established that by his failure to do so he thereby waived any claim to interest upon the amount by which the temporary tax exceeded such minimum, assuming that section 241 Tax of the Tax Law applied at the time the order was made ( Matter of Dick v. Murphy, 219 App. Div. 141, affd. 245 N.Y. 88). Appellants contend however that their claim should be determined under amendments to sections 230 Tax and 241 Tax of the Tax Law affected by chapter 144 of the Laws of 1925. Under the amendment of section 241 the whole temporary tax is to be held as mere security, deposited in every case for the account of the estate, with interest payable to the executor or trustee. Appellants' principal contention seems to be that the 1925 amendment to section 241 was merely a procedural change. The Special Term evidently was of the opinion that this contention was without merit, and we think justly so. It disregards the fact that sections 230 Tax and 241 Tax of the Tax Law must be read together, and the effect of the 1925 amendment to section 230 is to require the whole of the contingent tax, and not merely a portion thereof, to be deposited to the credit of the estate. This very substantial change is much more than procedural in nature ( Matter of Hecht, 219 App. Div. 656, affd. 246 N.Y. 602); and hence we think the Special Term was correct in holding that the 1925 amendments should not be retroactively applied. Order unanimously affirmed, with $10 costs to respondents.