
    In re Westurn's Estate.
    (Supreme Court, Appellate Division, Third Department,
    July 7, 1896.)
    l._ Inheritance tax—Appraisement of estate.
    A decision by an appraiser including as part of the estate a note payable to decedent, will not be disturbed on appeal where there was no testimony that the maker had any defense, or that it could not be collected.
    3. Same—Deduction of claims.
    A refusal to deduct from the amount of the estate claims against it will not he qisturbed where uo evidence is given to show that there were valid claims against the estate.
    Parker and Merwin, JJ., dissenting.
    Appeal from surrogate’s court, Warren, county.
    Proceeding for the appraisement of the estate of S-amuel West-um, deceased, under the inheritance tax law. Prom an order confirming the appraisal, the heirs and next of kin appeal. Affirmed.
    A. Armstrong, Jr., for app’lts; Potter & Kellogg (J. A. Kellogg, of counsel), for resp't.
   PUTNAM, J.

The heirs and next of kin of Samuel Westurn, deceased, appeal from an order of the surrogate of the county of Warren, miade and entered on the 24th day of February, 1896, affirming, as modified, an appraisal of the inheritance tax upon the interest of the said appellants. Samuel Western died on the 22d day of May, 1890. A paper purporting to be his last will and testament was thereupon offered for and admitted to probate by the surrogate of Warren county. After a long litigation, and on May 21, 1895, it was finally adjudged that said will was procured by fraud and undue influence, and was void, and that Samuel Western died intestate. Thereupon, on June 3, 1895, D. F. Keetffe and Adel Oarney were appointed administrators of the estate of said deceased. On the 6th day of July, 1895, the surrogate of Warren county appointed T. W. McArtur appraiser, under the provisions of chapter 483, Laws 1885, .as amended by chapter 713, Laws 1887, which, -as Samuel Western died in 1890, it was conceded applied to his estate. The appraiser, after hearing the proefs and 'allegations of the parties, made his report, which was confirm-eld hy the said surrogate on the 19th day of September, 1895. On the 11th day of November, thereafter, the appellant took an appeal from the said appraisement, under the provisions of section 13 of the said -collateral inheritance tax act. A hearing was had before the surrogate, and farther evidence offered and received; and upon the 24th day of February, 1896, the surrogate made the final order from which this appeal is taken.

It is urged by the appellants: That the order of appraisal made by the said surrogate under the said collateral inheritance tax act was unauthorized and erroneous, because it was made before the expiration of a year from the granting of letters of administration, and before the time advertised for creditors to present claims bad elapsed; because a large claim against the estate had been presented, and other claims were liable to be presented, which might reduce the amount of the estate liable to an. inheritance tax; and also because a note for $1,500, made by one Burgess, to recover which an action was pending, was included in the assets of the estate, although the maker disputed his liability. That, therefore, when the order from which the appeal is taken was made, it was impossible for the surrogate to determine the amount of the estate-that passed to the appellants. It is true Uia't under the provisions of section 1, chap. 483, Laws 1885, as amended by chapter 713, Laws 1887, it is only the property that passes to the '’mirs or next of kin that is subject to the inheritance tax. It has .been held that the tax becomes due and payable immediately upon the death of the testator, and that the property liable to taxation should be appraised, and the -tax assessed, as sojon after such death as practicable. In re Vassar, 127 N. Y. 1; 37 St. Rep. 239. But the act in question makes no provision as to the time when the surrogate shall appoint an appraiser or make an appraisement. In many cases, doubtless, the- appraisement may be made immediately after the issuing of letters testamentary or of administration. But it is obvious that there are other cases where such an appraisement cannot be made until the amount of the debts against an estate are ascertained by legal proceedings; as in the- ease of a deceased person leaving a large amount of* property, but against whose estate large claims are made, and contested by the personal representatives, it cannot be known what amount of claims will be allowed, and hence the amount of the estate that will pass to the heirs and next of kin, until the settlement of the estate. In such a case it is clear that a surrogate would be unable to ascertain the amount of the estate liable to a tax under the provision of section 1 of the act in question, until the amount of the debts was legally ascertained. Section 5 of the act is as follows:

“The .penalty of ten per cent, per annum imposed by section four hereof, for the non-payment of said tax, shall not be charged where in cases by reason, of claims made upon the estate, necessary litigation or other unavoidable cause of delay, the estate of any decedent, or a part thereof, cannot be settled at the end of -eighteen months from the death of the decedent, and in such cases only six per cent, per annum shall be charged upon the said tax, fr-om the expiration of said eighteen months until the cause of such delav is removed.”

This section recognizes the fact that a surrogate may find it necessary to delay an appraisement, in consequence of claims made on the estate, litigation, or other unavoidable cause of delay. The question -arises, did the surrogate err, in the case under consideration, in making the final order of appraisement on the 24th day of February, Í896, from' which this appeal is taken? It ¡should be remembered that the order was made nearly six years •after the death of Samuel Westurn. As before stated, the statute does not prescribe at what time the surrogate shall make an appraisement under the act in question. He is not compelled to wait until the final accounting of the executor or administrator. See In re Vassar, supra. He can maize the appraisement at any time when he is a,hie to determine the amount of the -estate that will pass to the heirs and next of kin.

The appellants object that the appraisement includes a note of one Burgess, of $1,500, to recover the amount of which an action was pending. The appraiser, however, received evidence in regard to the claim, and held it valid. There was no testimony on the rehearing before the surrogate to show -that the maker had any legal defense to the action upon the note, or that .he was not responsible, or that the note could not l>e collected. In the absence of such testimony, we see no reason to. interfere with the determination of the appraiser and the court below, Folding that such a note was an asset of the estate of said deceased, passing to the appellants ¡as his next o-f kin.

The -appellants also object to the order on the ground that a claim had been presented to the -administrator, and other claims were liable to be presented, that might reduce the amount of the -estate that would pass to the appellants. The appraiser had reported to the surrogate that there were no- debts against the -es-t-ate of said deceased that he had been able to ascertain. We think, on the appeal to- the- surrogate, it was the business of the .appellant to show, if they could, that the report of the appraiser wa-s erroneous. This they could have d-one by showing, or giving evidence tending to ¿how, that there were valid claims against the estate. Showing the fact that one Lucinda Taft had presented a claim for $2,160 did not avail the appellants, or show -erior in -the conclusion of the appraiser. The claim, on its face, was a suspicious one. It was for services alleged to- have been performed for the estate from March 1, 1882, to March 1, 1888. Such alleged services terminated -over two year's before the death of Pamnp.il Wes-turn, and the claim was sworn to- on the 8th -of «October, 4895,— over seven years after the alleged termination of the employment. There was no proof that any action or proceeding had been commenced. If the appellants had -offered -any testimony sufficient to maize out a prima facie case that the claim in question was a valid one, -or even a doubtful one, or that there were probably other valid claims against the estate of the said .deceased for any considerable sum, doubtless it would have been the duty of the surrogate to have delayed the appraisement. Put under the peculiar circumstances of this case, considering the long period that had elapsed since the death of Samuel Western, when the order appealed from was made, the length of time the inheritance tax on his estate bad remained unpaid, and the fact that the statute does not prescribe the time when the appraisement shall he made, we are of the opinion that the surrogate, in his discretion, was authorized to determine the amount of the estate that passed to the appellants, at the time he did, in the best manner that he was ab'letodo. And, on examining the testimony offered or given hy the appellants on the appeal to the .surrogate from the appraisement made, we are unable to determine that there was any error in the final order herein.

The order should be affirmed, with costs to the respondent to be paid out of the estate.

LARDON and HERRICK, JJ., concur; PARKER, P. J., and MERWIN, J., dissent.  