
    Matter of the Appraisal under the Transfer Tax Acts of the Property of George William Sutton, Deceased.
    
    (Surrogate’s Court, Westchester County,
    December, 1895).
    1. Transfer tax—Real estate.
    The mere fact that there is an equitable conversion by the terms of the will does not render the real. estate taxable under the. Transfer Tax Act. .
    2. Same—Mortgages.
    Mortgage debts of the testator are not to be deducted from the per-' sonal property for the purpose of arriving at the value of the estate.
    Proceedings under the Transfer Tax Act.
    
      Martin S. Smith, for executors, appellants.
    
      James M. Hunt, for County Treasurer, respondent.
    
      
       Received too late for insertion in proper place.—[Reporter.
    
   Silkman, S.

The decree assessing tax in this matter must be modified in so far as a tax is assessed Upon the succession to the equity of redemption in the real estate. The ground Upon which such tax was assessed is that such equity of redemption is personalty under the rule of equitable conversion and the succession thereto is, therefore, taxable. There is a clear equitable conversion by the terms of testator’s will.

Laws providing a system of taxation are to be construed as • relating to facts, not legal fictions or equitable rules. Hoyt v. Commissioners of Taxes, 23 N. Y. 228; In re Romaine, 127 id. 80.

The doctrine of equitable conversion does not apply in all cases. Wilder v. Ranney, 95 N. Y. 7.

The property of which the testator died possessed was in fact real estate and taxable as such. By another equitable rule the parties in interest, if all 'swi juris, could by uniting take it in place of the proceeds, and a court of equity would on application restrain the exercise' of, the power of sale in the executors and thus the property might never take on the character of personalty.

The claim of the legatees, that mortgage debts should have been deducted by the appraiser from the amount of the' personal property for the purpose of arriving at the value of the succession, cannot be sustained. .

The real estate is the primary fund out of which the mortgages are to be paid, and the legatees take only the equity of redemption ; such is the .law of this state.

An order may be entered modifying as indicated the decree entered upon the appraiser’s report.

Decreed accordingly.  