In re Houdayer (3 A.D. 474, 1896)

Barrett, J.:

The question here is, whether the balance due the decedent at the. time of his death, resulting from deposits made by him individually in a trust account which, as trustee under the will of Edmund Hus-son, deceased, he had opened in the Farmers’ Loan and Trust Company of this city, was “ property ” of the decedent “ within this-State,” within the meaning of the Taxable Transfers Act (Laws of 1892, chap. 399, § 1, subd. 2). It is well settled that the legal relation which existed between the decedent, as such trustee, and the-Farmers’ Loan and Trust Company, was that of debtor and creditor. The deposits became the property of the trust company, and thereupon the company became indebted to the depositor for the amount so deposited. Here, however, even this relation existed only between the decedent in his representative capacity (as trustee under the will of Edmund Hnsson) and the company. Individually he occupied no-contract relation toward the company. His individual deposits simply went to swell the trust account. Ordinarily it would have required an accounting in equity to separate the individual from the trust deposits, and to appropriate the general bank balance in accordance with just principles. Here this separation was amicably arranged between the decedent’s estate and the trust estate, but this was merely a friendly substitute for an accounting. Precisely what the decedent had individually within this State was the right to an accounting in equity with regard to a debt due by the company to himself as Husson’s trustee. We do not think that the debt was property within this State within the meaning of the Taxable Transfers Act. Much less was the right to an accounting with respect to such debt. It is provided by section 22- of the act in question, that the word property, as used therein, shall well as by the deliberate judgment of the Supreme Court of the United States in the Foreign-held Bond case. * ■

The conclusion at which we have arrived is amply supported, not only by what was said in the James case, but also by the illustrative reasoning in the Phipps Case (77 Hun, 325),. which latter case was affirmed (143 N. Y. 641) upon the opinion of Yan Brunt, P. J. In thus substantially adopting the views of the jiresiding justice in that case and in subsequently asserting similar views in the James case, the Court of Appeals has undoubtedly limited the Pomaine case to the strictest application of its special facts, and has emphasized the general principle which was enforced-in the Foreign-held, Bond case. Speaking in the James case of a similar act to that now under consideration, Gray, J., said : “ We do not think it was the intendment of the act of 1887 to reach for purposes of taxation any personal property that was not within the State either in fact pr because of the domicile here of its owner. The reading of the act does not authorize us to construe it as an effort to tax that over - which there was no jurisdiction, and it would be highly improper to-impute to the Legislature such an intention.”

This language is equally applicable to the act of 1892, and we think it is decisive of the present appeal.

The order appealed from should be reversed, with costs,

Yan Brunt, P. J., Rumsey .and Ingraham, JJ., concurred; O’Brien, J., concurred in result.

Order reversed, with costs.