The court held that the testator clearly expressed his purposes to the effect that the taxes were to be charged against the residuary estate. In Re Randell's Estate, 147 Misc. 358, 263 N.Y.S. 778, the court said: "The language of clause sixth of the will, dealing as it does in the same sentence with expenses of administration and taxes, gives further support to the thought that legacies to the general legatees are payable without deduction.
Paragraph "Fifth" of the decedent's will provides: "I direct that any and all inheritance, estate, transfer, succession and legacy taxes levied by the United States of America or by any State or Territory thereof or political subdivision of any such State or Territory upon or with respect to my estate or to any part thereof shall be borne by and paid from the corpus of my trust estate." "No precise words are necessary to indicate the intention to deny apportionment, so long as that intention clearly appears from the words of the instrument ( Matter of Halle, 270 App. Div. 619, Matter of Randell, 147 Misc. 358)" ( Matter of Frank, 195 Misc. 406, 407). However, "in the absence of a clear, unambiguous direction to the contrary in the will, apportionment pursuant to statute will be directed.
Matter of Fairchild ( 15 Misc.2d 272) did not have a "grouping of payments" clause as the case at bar nor a paragraph similar to paragraph Eighth of the decedent's will. The fact that the decedent utilized the words "inheritance taxes" instead of "estate taxes" is of no moment ( Farmers' Loan Trust Co. v. Winthrop, 238 N.Y. 488; Matter of Randell, 147 Misc. 358). The court in Matter of Wise ( 20 A.D.2d 55, 59, affd. 15 N.Y.2d 591) held that the words "inheritance taxes" were not synonymous with "estate taxes" due to the fact that the decedent in that case used "estate taxes" in some sections of his will and "inheritance taxes" in another, and the court ruled that it was obvious that the decedent intended their strict interpretation.
The residuary estate to be divided as provided for in article Eighth can be determined only after the discharge of administration expenses and, because the testator has unconditionally included them, taxes fall within that category. "By thus grouping or bracketing estate taxes with debts, funeral and administration expenses, which debts and expenses are ordinarily payable out of the general estate, the testator has in effect `otherwise directed' i.e., has directed that estate taxes, as well as debts, funeral and testamentary expenses, be deducted and paid out of the general estate without apportionment under Section 124 so that the dispositive provisions would apply only to the net estate remaining after such payments or deductions. Matter of Hund, 266 App. Div. 379, 42 N. Y. S. 2d 505; Matter of James's Estate, 180 Misc. 441, 40 N. Y. S. 2d 4, affirmed, 267 App. Div. 761, 45 N. Y. S. 2d 938; Matter of Weeks, FOLEY, S., In re Ball's Will, Misc. 24 N. Y. S. 2d 432; Matter of Randell's Estate, 147 Misc. 358, 267 N. Y. S. 778." (Matter of Sykes, 53 N. Y. S. 2d 442, 447.)
"By thus grouping or bracketing estate taxes with debts, funeral and administration expenses, which debts and expenses are ordinarily payable out of the general estate, the testator has in effect `otherwise directed' i.e., has directed that estate taxes, as well as debts, funeral and testamentary expenses, be deducted and paid out of the general estate without apportionment under Section 124 so that the dispositive provisions would apply only to the net estate remaining after such payments or deductions. Matter of Hund, 266 A.D. 379, 42 N.Y.S.2d 505; Matter of James's Estate, 180 Misc. 441, 40 N.Y.S.2d 4, affirmed, 267 A.D. 761, 45 N.Y.S.2d 938; Matter of Weeks, FOLEY, S., In re Ball's Will, Misc. 24 N.Y.S.2d 432; Matter of Randell's Estate, 147 Misc. 358, 267 N.Y.S. 778." ( Matter of Sykes, 53 N.Y.S.2d 442, 447.)
A testator may by an intention clearly expressed, charge his residuary estate with the payment of all transfer, estate or succession taxes on gifts or devises made by him ( Matter of Duryea, 277 N.Y. 310; Matter of Stetson, 168 Misc. 836), but evidence of that intention must be clear and unambiguous ( Matter of Mills, 180 Misc. 136, affd. 272 A.D. 229, affd. 297 N.Y. 1012). No precise words are necessary to indicate the intention to deny apportionment, so long as that intention clearly appears from the words of the instrument ( Matter of Halle, 270 A.D. 619; Matter of Randell, 147 Misc. 358). Where property which is subject to possible contribution has been transferred to the donee separately and apart from any disposition by will the courts have construed directions to pay estate taxes out of the residue as not comprehending taxes resulting from these inter vivos transfers ( Matter of Mills, supra; Matter of Appel, 189 Misc. 417; Matter of Sykes,
By 1937 there had arisen scores of questions about tax apportionment. A few instances are Matter of Caswell ( 239 N.Y. 695 ), Matter of Murdoch ( 142 Misc. 186), Matter of Randell ( 147 Misc. 358), Matter of Adler ( 151 Misc. 338), Matter of Stern ( 153 Misc. 442), Matter of Starr ( 157 Misc. 103), Matter of Scott ( 158 Misc. 481) and Matter of Rogers ( 159 Misc. 86, affd. 249 A.D. 238). If deceased had the special knowledge of tax law which is argued for he knew that his text did not contain the direction against apportionment which the statute and the cases required for exoneration.
At the time it was drawn, the rule of the statute directing tax contribution had been in operation for many years and the distinction between the true estate and the "tax" estate was well known. The reported cases had repeatedly dealt with the burden of estate taxes and with the application of the terms of section 124 of Decedent Estate Law. Among the cases reported prior to the drafting of the will are Matter of Caswell ( 239 A.D. 695), Matter of Murdoch ( 142 Misc. 186), Matter of Randell ( 147 Misc. 358), Matter of Adler ( 151 Misc. 338), Matter of Stern ( 153 Misc. 442), Matter of Starr ( 157 Misc. 103), Matter of Scott ( 158 Misc. 481) and Matter of Rogers ( 159 Misc. 86, affd. 249 A.D. 238). These reported cases constitute only a small fraction of the total number of instances in which tax allocations were made in this period. The bar was quite alive to the existence of section 124 of Decedent Estate Law and aware that its terms were being applied regularly in the closing of estates.
When the codicil was drawn much had been written about the impact of estate taxes. A few of the many instances of such discussions may be seen in Matter of Murdoch ( 142 Misc. 186); Matter of Randell ( 147 Misc. 358); Matter of Adler ( 151 Misc. 338); Matter of Stern ( 153 Misc. 442); Matter of Duryea ( 156 Misc. 144); Matter of Starr ( 157 Misc. 103); Matter of Rogers ( 159 Misc. 86, affd. 249 A.D. 238); Matter of Duryea ( 250 A.D. 305). In Matter of Duryea ( supra) this court had said (and the Court of Appeals approved [ 277 N.Y. 310]) that the maker of a will was to be deemed cognizant of the tax laws operative on his estate and that the courts would act on that assumption.