
    In the Matter of the Estate of Julia A. Smith, Deceased.
    
      (Supreme Court, General Term, Fifth Department,
    
    
      Filed March, 1894.)
    
    Taxes—Transfer—Exemption.
    Section 2, chap. 399 of 1892, does not exempt foreign corporations from. the operation of the act.
    Appeal by the county treasurer of Orleans county from a decree of the surrogate’s court of said county.
    
      M B. Simons, for app’lt; D. W Perkins, for resp’t.
   Lewis, J.

Mrs Julia A. Smith, deceased, by her will which was admitted to probate by the surrogate of Orleans county on the 23d day of March, 1891, made bequests to three Foreign. Missionary Societies, namely, The American Baptist Missionary Union, The Woman’s American Baptist Home Missionary Society, and The Woman’s Baptist Foreign Mission Society ; to one the sum of one thousand dollars, and to the others the sum of' two thousand dollars each. This proceeding was instituted before the surrogate of Orleans county for the assessment and collection of the collateral inheritance tax on said bequests. The learned surrogate held and decided that the societies mentioned were not liable for the legacy tax on the sums so bequeathed to them for the reason that they were exempt from the payment thereof by the provisions of § 2 of chap. 399 of the Laws of 1892. The treasurer of the county of Orleans, who was a party to the proceeding, appealed from the decree. Whether said societies are liable for the said tax is the only question presented for our decision and that involves the construction of our Collateral Inheritance Statutes, chap. 483, of the Laws of 1885, was the first act passed providing for such a tax. It was amended by several subsequent statutes. A general' law was passed covering the entire subject, being chap. 399 of the Laws of 1892, which took effect' on the 30th day of April of that year. The first section of the act provides for imposing a tax of five per cent, upon the transfer of any property, real or personal, of the value of five hundred dollars or over when the transfer is by will or by the intestate laws of the state of any person dying, seized or possessed of the property while a resident of the state or when the transfer is by will of property within the state and the decedent was a non-resident of the state at the time of his death,, except as otherwise prescribed in § 2 of the act. Section 2 provides for a tax of one per cent, upon the property passing by such transfer to the use of certain relatives of the deceased mentioned in the section. The following provision is contained in. this section. “But any property heretofore or hereafter devised or bequeathed to any person who is a bishop, or to any religious-corporation shall be exempt from and npt subject to the provisions of this act.” The learned surrogate held that the institutions mentioned were in consequence of this provision exempt from the payment of the tax, and whether the construction given to the section is correct depends upon whether the words “Religious Corporation” includes the corporations' of that character, foreign as well as domestic. The language of the proviso is quite general and says that any property heretofore or hereafter devised or bequeathed to any person who is a bishop, or to any religious corporation shall be exempt and not subject to the provisions of the act. We are not referred to any reported case deciding this precise question. The court of appeals in the Matter of the Estate of Prime, 136 N. Y. 347; 49 St. Rep. 658, gave construction to the act, chapter 553 of the Laws of 1890. The purpose of the latter act was to limit the amount of property, as well as the income therefrom which might be held by any religious, educational and other societies mentioned. There was a provision in the act, that chapter 483 of the Laws of 1885, entitled an act to tax gifts, legacies and collateral inheritance in certain cases, and the acts amendatory thereof shall not apply thereto nor to any gifts to any such corporation by grant, bequest or otherwise. Certain foreign corporations were named in Prime’s will as legatees and they claimed exemption from the inheritance tax. It was held by the court of appeals that the statute had application to domestic corporations only and' did not include foreign corporations. While the question before us was not involved in the decision of the Prime case the court very elaborately discusses the right of foreign corporations under the statutes of our state and enunciated a general rule of construction which would seem to fully cover the questions presented in the case at bar. Chief Justice Andrews in his opinion says: “We are of opinion that a statute of a state granting powers and privileges to corporations must, in the-absence of plain indications to the contrary be held to apply only to corporations created by the state, and over which it has the power of visitation and control. Such is the natural interpretation of such legislation in the absence of a contrary intention appearing on the face of the act. The legislature in such cases is dealing with its own creations whose rights and obligations it may limit, define and control.” He further says: “It is the policy of society to encourage benevolence and charity. But it is not the proper function of the state to go outside of its own limits, and devote its resources for the benefit of mankind at large.” The Prime case was decided by the general term in April, 1892, it was appealed to the court of appeals and decided by that court in January, 1893. The act of 1892 which we are considering, became a law April 30th of that year. The members of the court of appeals were undoubtedly aware of the provisions of the act of 1892 and may have intended in laying down the doctrine for the construction of the statute above referred to, to establish a rule for the guidance of the courts in cases which might arise thereunder. The act of 1892 grants certain privileges to religious corporations, but as there is an absence of any plain indications, to foreign corporations we are inclined to hold that under the doctrine of the Prime case the three societies mentioned are liable to the payment of the legacy tax. The decree of the surrogate appealed from should be reversed and the proceedings remitted to that, court with directions to determine the amount of tax to the payment of which the legatees mentioned are liable, without costs of this appeal to either party.

Dwight, P. J., Haight & Bradley, JJ., concur.  