In re Estate of Sherwell

By the provision of the Collateral Inheritance Act (§ 1, chap, 483, Laws of 1885, as amended by chap. 713, Laws of 1887) exempting'from the taxation imposed by the act “ an estate which may be valued at a less sum than five hundred dollars,” it was not the intention to exempt all taxable estates to the extent of the sum named, but to limit the estates upon which the tax shall he imposed. Where, therefore, an inheritance or testamentary gift coming within the general terms of the act exceeds in value the sum of $500, the whole thereof is taxable; if the value is less than that sum, as to it, the act is wholly inoperative. The act does not grant exemption from taxation in certain cases, but defines the cases in which the taxing power is applied, as new objects for taxation. It seems the legislature is not controlled as to the extent of taxation of property within the state, or in. the selection of its subjects for the raising of revenue for state uses, save where restrictions may be found in its Constitution. So, also, in imposing a special tax upon all persons within a certain class, there is no violation of fundamental principles,

' Appeal from order of the General Term of the Supreme -Court in the second judicial department, made January 2, 1891, which reversed an order of the Surrogate’s Court of Kings county declaring three certain legacies under the will of Benjamin Sherwell, deceased, exempt to the amount of $500 each. Decedent, at the time of his death, resided in England. He left a will which was duly admitted to probate in that country, and letters of administration, with the will annexed, were issued by the surrogate of the county of Kings. The administrator petitioned for an order fixing the amount of tax to be imposed under the Collateral Inheritance Act upon the sum of $4,896.25 going to three residuary legatees under the will. The surrogate decided that the sum of $500 should be deducted from the share of each of the legatees, and so, that $1,500 should be deducted from the fund, and the balance only should be assessed for the purposes of taxation under tire act. The share of each niece is exempt from taxation under the act to the amount of $500. (Laws of 1887, chap. 713, § 1.) It is a fundamental principle to be applied to all systems and subjects of taxation, whether the tax be general or against a particular class, that the burden shall be borne as nearly equally as possible among the members of the class taxed. (Cooley on Tax. [2d ed.] 169.) The respondent errs in contending that every one whose legacy or distributive share is less than $500 is exempt for the full amount; but those whose legacy or distributive shares exceed that amount are subject to be taxed for the full amount. (2 R. S. [8th ed.] 1083, §§ 4, 5; Code Civ. Pro. §§ 1397, 1402; II. S. R. S. 679, chap. 10, § 3438.) If the clause 11 provided that an estate which may be valued at a less sum than five hundred dollars shall not be subject to such duty or tax,” be construed to work an exemption in whole or in part of estates which may be valued at a greater sum than $500, words which have a precise and. definite meaning are forced away from their proper signification and the greatest violence' is done to; the use of language. (Johnson v. H. R. R. R. Co., 49 N. Y. 455; Benton v. Wickwire, 54 id. 226; 2 Pars. on Cont. 495.) It has been the uniform rule to tax the entire legacy when the value equals or exceeds the sum of $500. (In re Kavanagh, 24 N. Y. S. R. 404; In re Peck, 30 id. 209; In re McCready, 10 id. 696; Redfield’s Surrogate Prac. [8th ed.] 571; In re Bird, 32 N. Y. S. R. 899.) The collateral inheritance tax is not one levied upon property, but upon the privilege of taking the property, and 'does not come within the constitutional requirement, that all taxes shall be equal and uniform. (In re McPherson, 104 N. Y. 306; In re Euston, 113 id. 182; Wallace v. Myers, 38 Fed. Rep. 184; Eyre v. Jacobs, 14 Gatt. 422.) The power of the legislature to classify subjects of taxation is unlimited, and so long as under like conditions and circumstances all would get the benefit of the privileges conferred, the tax is equally imposed. (S. M. Co. v. Wright, 33 Fed. Rep. 121; State v. L. Ins. Co., 40 La. Ann. 463; Wallace v. Myers, 38 Fed. Rep. 184.)