
    Matter of the Estate of Benjamin Burgheimer, Deceased.
    (Surrogate’s Court, New York County,
    August, 1915.)
    Wills — clause in, as to good-will of business — transfer tax.
    Where as the result of an oral agreement between testator and his brother, who was his partner in business, that in the event of either dying nothing should be paid by the survivor for the good-will or firm n.ime, and that the last will of each partner should contain such a provision, a clause in testator’s will that his death should not dissolve the partnership and that the extent of his interest in the firm should be determined within a certain time and nothing paid by his estate for the good-will or firm name does not justify a finding in a proceeding to fix a transfer tax that the good-will of the firm had no existence; the testator could not by his will reduce to nothing a substantial asset of his estate and thus escape its proper taxation.
    'Appeal from an order fixing the transfer tax.
    
      Lafayette B. Gleason (Schuyler C. Carlton and Alexander Otis, of counsel), for state comptroller.
    Otto A. Samuels (Ralph H. Blum, of counsel), for respondent.
   Fowler, S.

The decedent died October 8, 1913. His will contained this provision: In case I am a member of the copartnership firm of B. & J. Burgheimer, then it is my will and intention that said copartnership shall not be dissolved by my demise, but that the surviving member of that firm shall continue the business until the following July 1 or January 1, whichever d,ay first arrives, when stock shall be taken in the same manner as we have been accustomed to take stock, and the amount of my interest determined, but nothing shall be paid by my estate for the good will or-firm name.”

The transfer tax appraiser’s finding was that decedent had no good will as a partner in said firm, and an order was entered confirming the appraiser’s report. The state comptroller appeals from said report and order because of this finding, and on the further ground that the said good will was not worth less than $25,000. The testimony shows that decedent and his partner, who was his brother, had orally agreed that in the event of either dying nothing should be paid by the survivor for the good will or firm name of said business, and in addition it was agreed that wills should be made by each partner containing this provision. It is claimed this agreement was carried out and the wills made. It should be noted that the will which it was stated was made by the surviving partner was not introduced in evidence. The clause in decedent’s will above set forth, it is claimed, is a result of that agreement, and that upon that clause it is evident that the appraiser based his finding that the good will of said firm had no existence. An agreement between partners as to the devolution of the good will of their business on the death of either does not prove that there is no ‘ good will. ” Nor does it perhaps bind the state, not a party to the understanding. The transfer tax statute provides that property owned by a decedent at the time of his death is subject to a tax. This provision is subject to certain exemptions which do not apply in this particular case. Undoubtedly the decedent died owning an interest in the good-will and firm name of the copartnership above mentioned. Consequently the good-will formed a part of his estate as an asset. I fail to find any precedent by which testator, through the operation of his last will and testament, would be able to reduce to nothingness a substantial asset of his estate and thus escape its proper taxation. I have examined the authorities submitted by the respondent and do not think that they determine a legal finding different from that which I have expressed.

The value of the good-will and firm name does not appear to have been very clearly developed before the appraiser. This question should be resubmitted to him for further testimony and report. The appeal is therefore sustained and the order heretofore entered should be vacated and the matter remitted to the transfer tax appraiser for the purpose of taking further testimony as to the value of the said good will and firm name.

Settle order on notice sustaining appeal, vacating order fixing tax and remitting report to appraiser for the purpose of taking testimony as to the value of the good-will and firm name of the copartnership of which decedent had been a member.

Decreed accordingly.  