Sec. 344. Statute Providing no Method for Ascertaining Value of Life Estate.

The fact that the statute does not provide any method for ascertaining the value of the life estate is not material; for the court may in the absence of express direction adopt some practical way for ascertaining its value-for example, by referring to life and annuity tables. Valuation of a life estate under the New York statute of 1885 should be made according to the rules of the supreme court where no tables are specified in the statute.2

1 State v. Probate Court, 100 Minn. 192, 197, 110 N. W. 865.

2 In re Robertson, 5 Dem. Surr. (N. Y.) 92.

Sec. 345. Death of Life Tenant before Appraisal.

The fact that the life tenant may have died after the testator, though before the appraisal, will not affect the tax upon his interest.

In re Jones, 28 Misc. Rep. 356, 59 N. Y. Suppl. 983. Contra, Kahn v. Herold 147 Fed. 575, affirmed in 86 C. C. A. 598, 159 Fed. 608, 163 Fed. 947. (Under U. S. St. 1898.) See In re Hall, 36 Misc. 618, 73 N. Y. Suppl. 1124, where annuitant lived longer than estimated the remainderman should be charged only with what he actually got. Cf. cases cited, ante, s. 342, n. 1.

Sec. 346. Remainders.

Remainders should be valued by deducting from the whole estate the value of the primary estate,' except where payment is postponed till the remainder comes into possession, when the remainder interest may be chargeable with the whole tax on the whole estate 2 at the time the remainderman goes into possession.3

1 Howe v. Howe, 179 Mass. 546, 551, 55 L. R. A. 626. Dow v. Abbott, 197 Mass. 283, 288, 84 N. E. 96. In re Lange, 25 Misc. Rep. 466, 55 N. Y. Suppl. 750. Appeal of Commonwealth, 127 Pa. St. 435, 439, 17 A. 1094 (if remaindermen elect to pay in anticipation on the death of the decedent).

Under Ill. St. (Hurd's Sts. 1903, p. 1576) the only provision for deduction of the primary estate in assessing the value of the remainder interest is in s. 2 and that where the remainder goes to the collateral heirs, to a stranger to the blood, or to a body politic or corporate, in which case the value of the preceding estate is first to be deducted and the tax extended on the remainder only. In re Kingman, 220 Ill. 563, 77 N. E. 135.

The testator gave property in trust to pay the income to his wife for life. If the income was insufficient to realize $5,500 a year they are directed to use the principal to make up that amount. The widow died in 1900 and the appraiser, on her death, appraised her interest according to the annuity tables as of the death of the testator. The widow actually survived longer than the annuity tables reckoned and the court holds that the valuation of the estate in remainder

should be made as of the death of the life tenant, as it would be unthinkable that the remainderman might receive nothing whatever and still be assessed with a tax. In re Hall, 36 Misc. Rep. 618, 73 N. Y. Suppl. 1124.

2 Appeal of Commonwealth, 127 Pa. St. 435, 439, 17 A. 1094. Cooper v. Commonwealth, 5 Pa. Co. Ct. 271.

In re Connoly, 38 Misc. 533, 77 N. Y. Suppl. 1113. In re Goelet, 78 N. Y. Suppl. 47.

[See further, ante, ss. 231-4.]

Sec. 347. Remainder after Remarriage.

To appraise an interest after the death or remarriage of the widow, mortuary tables should not be used. While the probability of death may be estimated from these tables, there are no statistics available from which the probability of remarriage may even be conjectured.1 Where a life estate is determinable upon the remarriage of the life tenant, on the remarriage of the life tenant the appraiser should deduct from the principal fund the value of the estate of the widow during the term of her widowhood.2

1 Herold v. Shanley, 146 Fed. 20, 76 C. C. A. 478, affirming 141 Fed. 423 (N.J.). In re Sloane, 154 N. Y. 109, 114, 47 N. E. 978, 19 N. Y. App. Div. 411, 46 N. Y. Suppl. 264. As of what date interests on remarriage should be appraised see ante, s. 335, n. 2.

Sec. 348. Power to Order Production of Papers.

The court may have by law authority to compel the parties to furnish information to the appraisers,1 but not to force the corporations in which he was a stockholder to do so.2

1 In re Maris, 14 Pa. Co. Ct. 171, 3 Pa. Dist. 83.

2 Wis. St. 1903, c. 44, ss. 12 and 15, does not give to the county court the authority to order the corporation in which the decedent was a stockholder to produce its private books, papers and documents for inspection to enable the court to determine the value of the estate of the decedent and the amount of the tax to which the same is liable. The court finds that such supposed entries and statements made in the books, papers and documents of the corporation by its officers or agents have no more probative force as evidence in court, in the controversy between the executors and the state of Wisconsin, than oral declarations to the same effect, made by the same officers and agents would have had. Such entries and statements were obviously mere hearsay, made by third parties without the sanction of an oath. There is nothing in the statute authorizing the county court, whether acting as a judicial tribunal or as an appraiser, to compel a third party to produce his private books, papers and documents; and certainly the county court has no such power in the absence of statutory authority. A writ of prohibition against the proceedings in the county court was granted. State v. Carpenter, 129 Wis. 180, 108 N. W. 641, 8 L. R. A. N. S. 788.

Sec. 349. Appeal.1

Appraisal is usually subject to appeal by any party, including the state itself, even though the law may also provide a remedy by reappraisal. A right of appeal necessarily implies notice of the appraisal at some time.5

1 See further, proceedings to vacate appraisal, post, s. 393. As to appeal from assessment, see post s. 392.

2 Comm. v. Freedley, 21 Pa. St. (9 Harris) 33.

A failure to appraise can be corrected only by appeal and not by a proceeding to set aside the appraisal. In re Smith, 14 Misc. 169, 35 N. Y. Suppl. 701.

Becker v. Nye, 8 Cal. App. Cal. 129, 96 P. 333.

4 Morgan v. Warner, 162 N. Y. 612, 57 N. E. 1118, affirming 45 N. Y. App. Div. 428 (remedy by reappraisal in case of fraud is not exclusive but comptroller may appeal).

In re Belcher, 211 Pa. St. 615, 619, 61 A. 252.

Sec. 350. Appraisal has no Effect on Liability.

An appraisal has for its object simply to ascertain the value of the estate and not to determine whether the estate is subject to the tax. Where the estate is not subject to be assessed with the tax the entire proceeding is a nullity. Therefore the appraisal, although not appealed from, is not final on the question of the liability to tax.

Stinger v. Commonwealth, 26 Pa. St. (2 Casey) 422, 426.

CHAPTER XLI.

DEBTS AND EXPENSES.

§ 351. Debts of Decedent.

§ 352. Partnership Debts.

§ 353. Debts Secured by Real Estate.

§ 354. Marshaling Assets to Pay Debts. $355. Taxes on Real Estate.

356. Tax Paid Improperly.

§357. Stranger Paying Taxes on Land.

358. Expenses of Administration.

§ 359. Executor's Commissions Increased by Increase in Value of Estate.

360.

Where Will Forbids Commissions to Executors or Trustees.

§ 361. Practice where Expenses of Settlement Unknown.

§ 362. Embezzlement by Executor.

§ 363. Expenses of Executors in Defending Will.

§ 364. Expenses of Heirs Setting Aside Will.

§ 365. Action to Construe Will.

§ 366. Expenses of Resisting Adverse Claim.

§ 367. Controversy among Distributees.

§ 368. Broker's Commissions.

§369. Trustee's Commissions.

§ 370. Subrogation of Creditors.

§ 371. Federal Inheritance Tax.

§ 372. Foreign Inheritance Taxes.

§ 373. Funeral Expenses.

§ 374. Cemetery Lot and Tomb. § 375. Care of Cemetery Lots. 376.

Sec 351.

Masses.

Debts of Decedent.

The appraisal for purposes of the tax should consider the debts of the decedent,' and claims in litigation should be considered.2

In re

1Succession of Levy, 115 La. 378, 39 S. 37, affirmed Cahen v. Brewster, 203 U. S. 552, 27 S. Ct. 174, 51 L. Ed. 310. In re Westurn, 152 N. Y. 93, 100, 46 N. E. 315, reversing 8 N. Y. App. Div. 59 (under the act of 1892). In re Wormser, 36 Misc. Rep. 434, 73 N. Y. Suppl. 748. Appeal of Orcutt, 97 Pa. St. 179. Line, 155 Pa. St. 378, 391, 26 A. 728, 32 Wkly. Notes Cas. 376. Shelton v. Campbell, 109 Tenn. 690, 72 S. W. 112. Contra, In re Ludlow, 4 Misc. Rep. 594, 25 N. Y. Suppl. 989 (under the act of 1892). In re Millward, 6 Misc. Rep. 425, 27 N. Y. Suppl. 286. See Becker v. Nye, 8 Cal. App. Cal. 129, 96 P. 333, quære.

The surrogate may deduct from the value of the estate the amount of debts owing by the decedent. In re Millward, 6 Misc. Rep. 425, 27 N. Y. Suppl. 286. Real Estate. Where the land of the decedent passes to lineal descendants for life and at their death to collateral heirs, although the real estate descends intact to the collateral heirs, the tax must be assessed upon the valuation of the real estate after deducting the debts owing by the decedent at the time of his death. Appeal of Commonwealth, 127 Pa. St. 435, 440, 17 A. 1004.

Community Property. Where the deceased bequeathed to her husband all her property which consisted entirely of her share of the community property, the debts of the succession should be deducted in fixing the amount of the tax on inheritances. Succession of May, 120 La. 692, 45 S. 551.

Disbursements which it is admitted were made by the executor for debts must be allowed by the appraiser and it is error for him to reduce these amounts arbitrarily. In re Dimon, 82 N. Y. App. Div. 107, 81 N. Y. Suppl. 428. 2 A claim in litigation should be referred to the appraiser to take evidence and report what if any rebate or deduction from the tax imposed should be made because of the claim. In re Morgan, 36 Misc. 753, 74 N. Y. Suppl. 478.

It was proper to withhold half the sum claimed by a claimant against the estate from appraisal and taxation. But it is better practice that the order determining the tax should contain an appropriate recital to the effect that the determination of the taxability of the sum claimed is suspended until the disposition of litigation. In re Wormser, 28 Misc. 608, 59 N. Y. Suppl. 1088.

Sec. 352. Partnership Debts.

Partnership debts discharged with firm assets are not deducted from the assets of the decedent for the purposes of the tax.

Memphis Trust Co. v. Speed, 114 Tenn. 677, 88 S. W. 321.

Sec. 353. Debts Secured by Real Estate.

Where real estate is subject to mortgage, only the equity of redemption above the mortgage should be appraised,' even though the tax is laid on real estate of a non-resident and it is claimed that the doctrine of equitable conversion and exoneration should be applied to relieve the land from the encumbrance of the mortgage, and that the executors should bring the proceeds of the personal estate from the domicile and apply it to payment of the debt so as to leave the land free from encumbrance. So in appraising the residuary personal property the principal of a bond not due, signed by the decedent and secured by a mortgage upon his real estate, should not be deducted before estimating the taxable value of the bequests.3 The opposite rule seems to prevail in Michigan and Pennsylvania.^

1 In re Sutton, 3 N. Y. App. Div. 208, 212, 149 N. Y. 618. In re Skinner, 106 N. Y. App. Div. 217, 94 N. Y. Suppl. 144. See, also, In re Strong, 17 N. J. Law. J. 234.