
    In the Matter of the Appraisal of the Property of Philip Embury, Deceased, under the Act, entitled “An Act to Tax Gifts, Legacies and Collateral Inheritances in Certain Cases.” Benjamin T. Kissam and Aymar Embury, Executors, etc., of Philip Embury, Deceased, Appellants; Ashbel P. Fitch, as Comptroller of the City of New York, Respondent.
    
      Collateral inheriicmee tern—when personal property of a non-resident decedent within this State at the time of his death, hut subsequently removed, is not taxable.
    
    The Surrogate’s Court of the county of New York has, under chapter 713 of the Laws of 1887, amending the Collateral Inheritance Tax Law, no jurisdiction to impose a tax upon the bank stock and deposits in banks, in New York "city, belonging to the estate of a non-resident decedent, which the executors of his estate have removed from the State of New York in 1887 after the passage of the above act, and have distributed; nor is such jurisdiction conferred by the provisions of the General Tax: Law (Chap. 908 of the Laws of 1896); as the latter act only gave the Surrogate’s Court jurisdiction over property of nonresident decedents within its territory, and in this cáse there was no such property at the time of such enactment or subsequent thereto.
    The collateral inheritance tax being a tax, not Upon property, but upon the right of succession which exists merely by .the favor of" the State, it follows that, as to personal property within the State of New York belonging to nonresident decedents, the succession' thereto under the laws of a foreign State cannot be taxed by the State of New York, which in such case can only impose a tax based on its dominion over the property situated within its territory. ' .
    Appeal by Benjamin T. Kissam and Aymar Embury, executors, etc., of Philip Embury, deceased, from an order of the Surrogate’s Court of the county of New York, entered in the office of said Surrogate’s Court on the 5th day of March, 1897, denying their application to dismiss the proceedings on the ground that the Surrogate’s Court had no jurisdiction thereof or to proceed thereon.
    
      Lucius H. Beers, for the appellants.
    
      Emmet R. Olcott, for the comptroller, respondent.
   Parker, J.:

After the passage of chapter 4.83. of the Laws of 1885, then known as the Collateral Inheritance Act, it became a matter of legal controversy whether the property of a non-resident decedent, situate within this State, was subject to the tax provided for by such act. It was finally decided by the Court of Appeals, in the year 1889, that it did not affect property within this State which passed by will or intestacy from a non-resident decedent to collateral relatives oi strangers. (Matter of Enston, 113 N. Y. 174.)

Intermediate the passage of the statute and the decision in Matter of Enston, the Legislature amended such act by chapter 713 of the Laws of 1887, and it was later held, but by a divided court, that one of the objects of the amendment was to tax the personal property within this State owned by a non-resident decedent. (Matter of Estate of Romaine, 127 N. Y. 80.)

A few months after the amendment of 1887 took effect, Philip Embury, a citizen of and resident in New Jersey, died at "West Orange, in that State. He left a will, in which he made disposition of all his estate, and appointed as executors Benjamin T. Kissam and Aymar Embury, both of whom were, at the date of testator’s death, and ever since have been, citizens of and residents of. New Jersey. The will was thereafter duly probated in Essex county, New Jersey. Subsequently, and in November, 1888, the executors rendered an account of their trust before the Orphans’ Court of Essex county, N"W Jersey, and were discharged. The will was not proved, nor were ancillary executors or administrators appointed in this State, nor did the executors invoke the laws of the State of New York for any purpose. Philip Embury, at the time of his death, was not the owner of any real property in the State of New York, but he was the owner of certain stocks of New York banks, and had moneys on deposit both in a bank and a trust. company doing business in the city of New York. The' executors withdrew the deposits and took them, together with the bank shares or their proceeds, to New-Jersey for disposition in accordance with the provisions of the will, prior to their being discharged as executors. The executors did not pay any tax under the “ Collateral Inheritance Tax Act ” of 1887, nor did the Surrogate’s Court of New York county have jurisdiction to appoint an appraiser and fix the value of the personal property and the amount of the tax thereon. The section of the act of 1887 which attempts to confer jurisdiction on the Surrogate’s Court (§ 15) reads as follows: The Surrogate’s Court in the county in which the real property is situate of a decedent who was not a resident of the State, or in the county of which the decedent was a resident at the time of his death, shall have jurisdiction to hear and determine all questions in relation to the tax arising under the provisions of this act, and the surrogate first acquiring jurisdiction hereunder shall retain the samé to the exclusion of every other.”

The statute, therefore, only conferred on the surrogate jurisdiction in the ease of such non-resident decedents' as should die seized of real estate within the surrogate’s county. It was so held in Matter of Enston (113 N. Y. 174, 181). The act of 1885 was under consideration, but section 15 of that act is precisely the same 'as section 15 of the act of 1887.

It is true that in Matter of Estate of Romaine (127 N. Y. 80) it was held that the amendment of 1887 rendered liable to taxation all the personal property within this State belonging to a non-resident intestate at the time of .his death and which, was habitually kept or invested by him here, but the question presented in this case of the' absence of authority on the part of the Surrogate’s Court to take the steps necessary to the imposition and collection of the tax was neither raised nor considered. - It has been held in Matter of Enston (supra) that the act of 1885 did not subject the personal property of a nonresident decedent to taxationand the question considered in Matter of Estate of Romaine (supra) was whether the act of 1887 was-intended to accomplish that result. The court decided that such was the intention. But the intention to impose a collateral' inheritanee tax on certain property of non-residents did not operate to-confer. jurisdiction on the Surrogate’s Court to proceed to tax such property. Its jurisdiction was provided by .section 15, which, as we have already seen, was, as to non-resident decedents, limited to cases in which a non-resident decedent left real estate within the county.

In other words, the statute of 1885, as amended by the act of 1887, declared such of Embury’s property, as was in New York taxable,- but omitted to give the Surrogate’s Court jurisdiction to impose the .tax, a situation to which an expression of the Court of Appeals in The Matter of Stewart (131 N. Y. 284) is applicable : “ It is not enough for the Legislature to declare that such interests are taxable. If no mode is provided for assessing and collecting the tax the law is imperfect and cannot, as to such interests, be executed.”

A tax cannot bé legally imposed unless the statute in addition to creating the tax, provided for an officer or tribunal who shall appraise and assess the property on notice to the owner. (Stuart v. Palmer, 74 N. Y. 188 ; Remsen v. Wheeler, 105 id. 575.)

The principle decided in the cases cited applies to the transfer tax as well as to assessments for public improvements. (Matter of McPherson, 104 N. Y. 321.)

In the latter case the court, having under consideration the collateral inheritance tax, said:

“ This tax is imposed according ,to the value of the legacy and collateral inheritance liable to be taxed, and, hence, there must be some mode of ascertaining that value, and for that purpose judicial action is requisite at some stage of the proceeding before the liability of the taxpayer becomes finally fixed. He must have some kind of notice of the proceeding against him, and a hearing, or an opportunity to be heard, in reference to the value of his property and the amount of the tax which is thus to be imposed. Unless he has these, his constitutional right to due process of law has been invaded.”

It is apparent, therefore, that when the executors took the deposits and the bank stock out of the State for distribution, no tax had been imposed upon such property, and there was no method provided by law by which a tax could .be legally imposed upon it. What they did they had not only the right, but it was their duty, to do. The legal title to the property in this State vested in them as the personal representatives of their testator by force of the laws of New Jersey. (Matter of Bronson, 150 N. Y. 1.)

They were bound to take possession of it and make distribution according to the decree of the court having jurisdiction of the estate. Had a tax been imposed on the property, or had a statute providing for its imposition been in force, it would have been their duty to have paid it or to have requested the imposition of the tax, as the case might be, before removing the property.

But it was not their duty to allow these undivided assets to remain in New York in order that the Legislature might, at some future time, so amend the statute as to make it possible to impose a tax on such property.

The respondent does not claim that the Surrogate’s Court had jurisdiction, under the act of 1887, to fix the value of the property and the amount of the tax, or that there was any other procedure by which such a result could have been accomplished, but rather that the statute of. 1887 imposed a tax on this property for which the estate was liable, and that it only remained for the Legislature to so amend the,statute as to provide for collecting the tax which he contends was done by chapter 399 of the Laws of 1892.

The error of this position may be found in the assumption that, by the act of 1887, a tax was imposed on this property for which the estate, was liable. As we have already .pointed out a tax was not imposed on the property by the statute, and could not have been, in the absence of an appraisal by a taxing officer upon notice.

If the property was still in this State a different question would be presented, but free from the imposition of any tax it was taken to another State and, necessarily, beyond the jurisdiction of the Surrogate’s Court of Yew York, before the act of 1892 was passed. To such a situation the rule in The Matter of Davis (149 N. Y. 539), that “ the procedure is controlled by the statute as it existed at the time this proceeding was instituted,” has no application.

We have at all times referred to the property kept by the ajjpellant’s testator as the subject of taxation, and have done so advisedly, and, as we think, upon authority.

So far as residents are concerned, the courts have held that the tax is, not upon property, but on the right of succession. (Matter of Estate of Swift, 137 N. Y. 77; Matter of Seaman, 147 id. 69, 75.)

The constitutional right of the State to impose the tax upon the estate of residents is upheld on the ground that the right of succession being a right which exists merely by favor of the State, and under its statute, it is in the power of the State to curtail the right by taxing the succession, and so appropriating a part of the estate.

But as to personal property within this State belonging to nonresident decedents, the succession is under the law of a foreign State, and that succession cannot be taxed by this State.

In such case the right of the State to impose a tax is based on its dominion over the property situated within its territory. (Matter of Houdayer, 3 App. Div. 474; S. C. revd. in 150 N. Y. 37; Matter of Bronson, Id. 1, 8 ; Matter of James, 144 id. 10.)

Our conclusion then is that the act of 1887 did not give the Surrogate’s Court jurisdiction over this property, and that such court has not acquired' jurisdiction by virtue of the later amendments to the law, and now forming a part of the General Tax Law (Chap. 908, Laws of 1896), for the reason that the statute only attempts to confer jurisdiction on. the Surrogate’s Court over property of nonresident decedents within its territory, and there was no such property at the time of such enactment, or subsequent thereto. Years before there has been, but it was lawfully taken out of the State and ■ distributed. ■ ■

The order appealed from should be reversed and the proceedings dismissed, with ten dollars costs and printing disbursements.

Patterson, Rumsey, O’Brien and Ingraham,- JJ., concurred.

Order reversed and proceedings dismissed, with ten dollars costs and disbursements.  