Id.; Cannot Increase Value of Assets.

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492. Second Appraisal - Cannot Increase Value of Assets. Where the property of a decedent has been once honestly appraised at its fair market value as of the time of his death, the State Comptroller cannot institute a second appraisal in order to collect a tax on a foreign newspaper enterprise and on certain pictures belonging to decedent upon which the executor has since the first appraisal received sums much greater than those then estimated and fixed as the value. Matter of Rice, 29 Misc. Rep. 404, 61 N. Y. S. 911; affd., 56 App. Div. 253, 68 N. Y. S. 1147.

493. Id. Nor Decrease Deductions for Debts, etc.

The order made on the first appraisal is conclusive as to deductions allowed for debts, etc., and the Comptroller will not be permitted a second appraisal in order to show that the estimated deductions were excessive as compared with the actual payments made for such debts, etc. Matter of Rice (supra).

494. Appraisal Not Regular - When.

The report of the appraiser must show the grounds of his findings, and an appraisal is not regular where the record does not show that the proper officers representing the State have had due notice. Matter of Bolton, 35 Misc. Rep. 688, 72 N. Y. S. 430.

495. When Report Insufficient.

A report stating that the appraiser had appraised all the property of the deceased made known to him by the executor is insufficient. He should appraise all the property liable to tax regardless of the source of his information. Matter of Astor, 6 Dem. 413, 2 N. Y. S. 630. (Decision under Act of 1887.)

§ 230

When Appraiser Acts in Excess of Authority.

496. Surrogate May Order Further Appraisal.

Under section 230, chapter 908, Laws 1896, the surrogate had power to order a further appraisal, where personal property claimed by a daughter was not taxed, but which was subsequently adjudged as belonging to the decedent. Matter of Lansing, 31 Misc. Rep. 148, 64 N. Y. S. 1125.

497. New Proceeding.

In a new proceeding to appraise property of decedent omitted from the first appraisal, it should clearly appear in the report that all of the remaining property of the estate, subject in any contingency to the payment of the tax, is embraced within the proceeding. Matter of Earle, 74 App. Div. 458, 77 N. Y. S. 503.

498. Former Proceeding.

A transfer tax proceeding in this State expressly limited to real estate does not operate to suspend proceedings to tax personalty not disclosed on the first appraisal. Matter of Crerar, 31 Misc. Rep. 481, 65 N. Y. S. 573; revd. on other points, 56 App. Div. 479, 67 N. Y. S. 795.

499. Correction of Mathematical Errors.

Mathematical errors made by the appraiser in computing the values should be corrected. Matter of Draper, N. Y. Journal, December 30, 1908.

500. When Appraiser Acts in Excess of Authority.

Where the report has been remitted to the appraiser for reappraisal in certain respects and he makes a reappraisal of the whole estate, he acts in excess of the authority granted him by the order. But where upon such reappraisal a different computation

Appraisal of Securities.

§ 230

by the State Superintendent of Insurance is made from the values found by that official upon the first appraisal, if the surrogate believes the later computation to be correct, it is his duty to fix the tax as it ought to be, and the previous order fixing tax having been vacated, there is nothing in the way of the surrogate doing so. Matter of Barbey, N. Y. Law Journal, November 12, 1908, Surrogate Thomas.

501. Appraisal of Bonds, Stocks, and Securities.

Chapter 34, Laws of 1891,* in effect February 25th of that year, provides as follows:

Whenever by reason of the provisions of any law of this state it shall become necessary to appraise in whole or in part the estate of any deceased person, or of any insolvent estate in the hands of a receiver, or of any assignee for the benefit of creditors, or of any corporation in the hands of a receiver or otherwise, the persons whose duty it shall be to make such appraisal shall value the real estate at its full and true value, taking into consideration actual sales of neighboring real estate similarly situated during the year immediately preceding the date of such appraisal, if any; and they shall value all such property, stocks, bonds or securities as are customarily bought or sold in open markets in the city of New York or elsewhere, for the day on which such appraisal or report may be required, by ascertaining the range of the market and the average of prices as thus found, running through a reasonable period of time.

In re Crary, 31 Misc. Rep. 72, 64 N. Y. S. 566, the surrogate held that a period of three months immediately preceding decedent's death would ordinarily be considered a reasonable time within which to take the range of securities owned by decedent.

In re Gould, 19 App. Div. 352, 46 N. Y. S. 506, it was held that the rule laid down in the above statute gov

* Now § 122 of art. 4, chap. 18 of the Laws of 1909, as amended by 17 of chap. 240, Laws of 1909.

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§ 230

Value of Stock Is a Question of Fact.

erned the appraiser in fixing the fair market value of securities as required by the Transfer Tax Act of 1892, and that where no sales are made, he must determine their value from the best information he can obtain. That the number of shares held by a decedent which, if sold at one time, might depreciate the value, is not to be considered by the appraiser. And in Matter of Ottendorfer, N. Y. Law Journal of January 14, 1903, Fitzgerald, surrogate, held that this rule applied to the Transfer Tax Act of 1896 also.

It will be observed that in the above statute where real estate is to be appraised the sales of real estate which are to be considered are actual sales within one year immediately preceding the appraisal, not the decedent's death, and under the Transfer Tax Law the value is to be determined as of the decedent's death, and not as of the date of the appraisal. Therefore it is questionable whether the courts would hold that this statute applied also to the appraisal of real estate in transfer tax proceedings.

In the appraisal of estates for transfer tax purposes, however, the practice is to appraise the stock and securities of a decedent at their market value on the day of decedent's death, and it would seem that this is strictly in accordance with the decisions of the courts holding that the transfer takes place, and the tax accrues, at that time. Matter of Davis, 149 N. Y. 547. See People ex rel. K. F. Ins. Co. v. Coleman, 107 N. Y. 544, as to the market value and actual value of stocks.

502. Valuation of Stock Is a Question of Fact.

The valuation of stock is a question of fact, and where the decision of the surrogate on this question

Valuation of Unlisted Stocks.

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of fact has been unanimously affirmed by the Appellate Division it is conclusive on the Court of Appeals if no error of law is involved. Matter of Thayer, 193 N. Y. 430.

503. Valuation of Unlisted Stocks.

A large but minority holding of unlisted stock in a private business corporation controlled by a family should not be valued at the record figures of isolated sales of small blocks thereof in assessing an inheritance tax thereon, and it would seem that when such stocks are not the subject of free and customary market dealings, the manner of appraisal by record sales provided by chapter 34, Laws of 1891 (supra), does not apply. Matter of Curtice, 111 App. Div. 230; affd., 185 N. Y. 543.

Where it appeared that during the first and second years of its existence a corporation paid in each year an 8 per cent. dividend; that there was no regular market value for the stock, but that in January, 1897, two months before the decedent's death, an officer of the corporation sold 500 shares of the stock, having a par value of $100 a share, at $50 per share, and that in July of the same year he sold a like number of shares for the same price, and such officer testified that such price was the fair value of the stock, in the absence of any evidence as to the actual earnings of the corporation, other than the statement of the officers that the dividends were declared out of its earnings, held, that the evidence did not justify a finding that the value of the stock was greater than $50 per share. Matter of Smith, 71 App. App. Div. 602, 76 N. Y. S. 185.