
    The Equitable Trust Company of New York, as Successor Trustee under a Deed of Trust, Dated November 11, 1904, from Margaret L. Kingsley to the City Trust Company of New York, Plaintiff, v. Charlotte M. Kingsley and Others, Defendants.
    Supreme Court, New York Special Term,
    December, 1922.
    Trusts — trustee may recover from remainderman amount of transfer tax paid after accounting — trustee liable for amount of penalty.
    Where after an accounting and the turning over of the trust property to the remainderman the trustee pays a transfer tax with a penalty, the trustee may recover the amount of the tax from the remainderman but not the amount of the penalty.
    
      Suit to reopen an accounting.
    - Murray, Prentice & Aldrich (Archer P. Cram and Charles E. Kimball, Jr., of counsel), for plaintiff.
    
      John J. Kirby, for defendant Charlotte M. Kingsley.
    
      John B. Doyle, for defendant Katherine Conroy.
    
      Harrison Clark, for defendant Thomas M. Acken.
   Newburger, J.

In this case the trust company seeks to reopen its accounting of the trust referred to in Conroy v. Equitable Trust Co., ante, p. 672, in order that it might recover from the remainder-man, Charlotte M. Kingsley, the sum of $927.40 paid by it as a transfer tax on the 13th day of November, 1922, the day before the trial of this action. It is admitted that the plaintiff turned over all the property of the trust to the remainderman in 1916, and on an accounting in 1918 made no claim for such tax. The amount paid by the trust company included not only the tax, but also a penalty for failure to pay within the time required by law. The tax was payable at the source, and the defendant Charlotte M. Kingsley ought not to be penalized for a failure on the part of the trust company to take proceedings for the fixing of the amount of the tax and for the payment of the same. It is, however, entitled to recover the amount of the tax only, and the plaintiff may have a decree directing the repayment to it of the tax heretofore paid, without the penalty. Settle decree on notice.

Judgment accordingly.  