
    Matter of the Estate of Theodore A. Havemeyer, Deceased.
    (Surrogate’s Court, New York County,
    August, 1900.)
    Transfer tax — Not assessable upon proceeds of an unredeemed pledge of stock.
    Where a person pledges stock with brokers as collateral for a loan, the title passes to the brokers and only a right of redemption remains in him; and, therefore, where, after his death, the brokers sell the stock for an amount insufficient to repay them tbeir loan, no proceeds of the stock can pass to the estate of the decedent and no transfer tax can be assessed on account of the stock.
    Appeal from an order fixing the tax under the Transfer Tax Law.
    Purcell & Walker, for Comptroller.
    Parsons, Shepard & Ogden, for petitioner and administratrix.
    John W. Pierson, for executors of Charles E. Havemeyer.
   Thomas, S.

Appeal from an order fixing tax under Transfer Tax Law. In estimating the value of the entire personal estate of the testator for the purpose of ascertaining what portion of the indebtedness should be charged against assets taxable in this State the appraiser fixes the value of 4,800 shares of the stock of the American Sugar Refining Company at $528,000. The attorneys for the administratrix object to this appraisal and insist that, under the facts of the transaction concerning this block of 4,800 shares of stock, such stock constituted no part of the estate of the decedent. This stock was purchased for the decedent by his brokers for the gross price of $600,000, moneys which they advanced, and at the time of his death they held this stock, with other stock deposited with them, as collateral. After the death of the decedent this stock was sold for $528,000, showing a loss in the transaction of $72,209.46, which amount was made good by the administratrix out of the estate. Upon these facts the title of the decedent to the stock was not absolute, but he held merely the rights of a pledgee with relation to it, the brokers being the owners of the property at law, subject to his right to redeem upon paying the entire amount of the debt. Matter of Pullman, 46 App. Div. 574, 578. The sale of the stock made by the brokers for the satisfaction of their lien extinguished whatever right or title the decedent or his legal representatives had, and demonstrated that, instead of being the owner of the property, the decedent’s estate was indebted in the sum of $72,209.46. This debt was properly allowed by the appraiser, but he erred when, on the opposite side of the account, he charged to the estate the sum of $528,000, and this charge should be stricken from the report and the appeal of the administratrix allowed with respect thereto. The stock deposited by the decedent with his brokers as extra collateral security for the loan of $600,000 was not the property of the decedent, but formed a portion of an estate created by the decedent under a valid trust instrument, the terms of which were not revocable at his election, except with the consent of the beneficiaries of the trust. As to some of the stocks and bonds appraised and declared taxable, the evidence as to their values is not entirely satisfactory. Three printed volumes of a book known as The Commercial and Financial Chronicle ” are said to have been admitted in evidence, but the particular parts, pages or portions of these books relied upon by the appraiser have not been pointed out, and I am, therefore, unable to avail myself of any knowledge which the appraiser may have extracted from them, and I propose, therefore, to disregard the entries in these books. I fix the values of the stocks and bonds in dispute, from the evidence before me, as follows: 750 shares of Universal Lasting Machine Co. stock, $30; 50 shares Terminal Improvement Co. stock, $1,250; 250 shares Terminal Warehouse Co. stock, $1,250; 100 shares of American Enamel Brick & Tile Co. stock, $3,000; 45 shares of St. Andrew Co. stock, $1,050; 5 shares Brooklyn Wharf & Warehouse Co. stock, $27; bonds of Terminal Warehouse Co., appraised at $37,500, I value at $26,250; bonds of the New York Deutscher Verein, appraised at $20,000, I value at $10,000; bonds of the Hampton Roads Hotel Co., appraised at $99,000, I value at $94,150; bonds of Express Goal Line Equipment Co., appraised at $47,000, I value at that amount; bonds of New York & New Jersey Fire-Proofing Co., appraised at $5,000, I value at that amount; 1,106 shares of stock of the Berkshire Cotton Mfg. Co., appraised at $110,000, I value at $99,540; stock of the Sprague Electric Elevator Co., appraised at $3,600, I value at that amount; preferred stock of Sprague Electric Elevator Co., appraised at $5,600, I value at $3,920. Certain debts passed upon by the appraiser are objected to, and I dispose of them as follows: The Vienna account of $14,427.09, disallowed by the appraiser, I also disallow on the ground that this was a gift from the decedent and was not supported by any consideration whatever. The Washington bills, $5,002, disallowed by the appraiser, I allow. The Westbury bills, $19,683.19, disallowed by the appraiser, I also disallow on the ground that these debts were not sufficiently proved as debts of the decedent. An order may be submitted and settled upon notice, in conformity with the views expressed in this memorandum.  