Personal Property Defined; Assets of the Estate. § 220

37. "Personal Property" as Defined by the Statutory Construction Law.

As defined by the Statutory Construction Law (L. 1892, chap. 677, § 4), the term "personal property " includes "chattels, money, things in action, and all written instruments themselves as distinguished from the rights or interests to which they relate, by which any right, interest, lien or incumbrance in, to or upon property, or any debt or financial obligation is created, acknowledged, evidenced, transferred, discharged or defeated, wholly or in part, and everything, except real property, which may be the subject of ownership." Matter of Jones, 172 N. Y. 575, 585; Matter of Dun, 40 Misc. Rep. 509, 82 N. Y. S. 802. (See section 39 of article 2 of chapter 22 of the Consolidated Laws General Construction Laws, being chapter 27, Laws of 1909.)

38. What Shall Be Deemed Assets of the Estate.

66 The statute has declared what shall be deemed assets of the estate of a deceased person and subject to distribution by his executors or administrators (4 R. S., 8th ed., p. 2556, § 6), and includes among them choses in action and every other species of personal property and effects.''' Matter of Knoedler, 140 N. Y. 377-379.

The court in this case said, in answer to the contention of the appellants that life insurance policies were not property of which the testator dies seized and possessed at the time of his death: "But it must be admitted that they were obligations to pay money at a future date, and every instrument duly executed and having a lawful consideration, which secures to the holder the payment of money at a specified time, confers upon him a right of property."

66

§ 220 Beneficially Entitled; " Taxation of Personal Property.

39. When Person Becomes "Beneficially Entitled," etc.

Under Transfer Tax Law (L. 1896, chap. 908, as amended by chap. 284, L. 1897), section 220, subdivision 4, providing that the transfers shall be taxable when any person becomes beneficially entitled in possession or expectancy to any property or the income thereof property which passes under a father's will to his son, who dies before a settlement of the father's estate, which property is afterward delivered to the son's executor - is, when so delivered, subject to a transfer tax. Matter of Clinch, 44 Misc. Rep. 190, 89 N. Y. S. 802; affd., 99 App. Div. 298, 90 N. Y. S. 923; affd., 180 N. Y. 300.

40. Money Deposited in Bank to Pay Debt Owing to a Nonresident Decedent.

Money due a nonresident, who, owing to serious illness was unable to transact business, was given to his secretary in payment of the debt, and by him deposited in a bank in New York city as a special account in the creditor's name, where it remained until after the creditor's death. Held, that the money was subject to the creditor's order at the time of his death, and the creditor having died without affirming or disaffirming the transaction, and his estate having received the special deposit as money due from the bank, the law would so treat it, and hence it was subject to a transfer tax in this State. Matter of Daly, 100 App. Div. 373, 91 N. Y. S. 858; affd., 182 N. Y. 524, no opinion.

41. Personal Property Wherever Situated Is Taxable.

The personal property of a resident decedent, whether situated within or without this State, is taxable. Matter of Swift, 137 N. Y. 77; Matter of Corning, 3 Misc. Rep. 160, 23 N. Y. S. 285.

Residence of Beneficiary Not Material.

42. When Administered upon without the State.

§ 220

Personal property of a resident decedent located without the State is taxable, although it was administered upon by a foreign executor, and the property passed to foreign heirs or next of kin. Matter of Dingman, 66 App. Div. 228, 72 N. Y. S. 694.

43. Residence of Beneficiary Not Material.

Whether the beneficiaries reside in this State or elsewhere, it is not important as affecting the taxability of the property transferred. Matter of Greene, 153 N. Y. 223.

44. Note of Legatee, Included in Bequest of Residuary Estate.

Where a bequest of the residuary estate includes a note made by the legatee, the amount thereof is taxable. Matter of Tuigg, 2 Con. 633. (Decision, Act of 1887.)

45. Judgment in Favor of Decedent against Heir or Legatee.

A judgment against an heir or legatee in favor of the decedent should be appraised. Matter of Smith, 14 Misc. Rep. 169, 35 N. Y. S. 701.

46. Land Devised Subject to a Mortgage.

A devisee of land which is subject to a mortgage takes it cum onere, and the equity therein is only liable to taxation. Matter of Kene, 8 Misc. Rep. 102, 29 N. Y. S. 1078.

47. Debts Due from a Legatee.

Where testator gives his estate for life to his wife, and at her death directs that the whole thereof, including the indebtedness of two sons for moneys theretofore lent and advanced to them, shall be divided among his children, the appraiser should include in his valua

§ 220

Good Will of Business; Id.; Defined.

tion of the estate the indebtedness due from such sons, although they are two of the seven residuary legatees. Matter of Bartlett, 4 Misc. Rep. 380, 25 N. Y. S. 990.

48. Interest of Decedent in Surplus Fund in Partition Suit.

The deceased, an infant about sixteen years old, left her surviving a father, brother, and sister, and owned at the time of her death an interest in a fund deposited to the credit of a partition action to which she was a party. Held, that her interest in such fund, although the proceeds of the sale of land, was not real property, and therefore was not exempt from taxation under the Act of 1892. Matter of Stiger, 7 Misc. Rep. 268, 28 N. Y. S. 163.

49. Good Will of Business Good Will Defined.

The good will of a business, as property, is intangible and must always attach to and rest upon some principal tangible thing, such as an established business. (20 Cyc. 1276.) It is an advantage or benefit that has been acquired by and belongs to the proprietors of an existing business. Boon v. Moss, 70 N. Y. 465.

An administratrix of a deceased insurance agent is not required to account for the good will of his insurance business if his agencies had expired before his death, for whatever benefit he acquired in his business, it did not survive the termination of his contract with the insurance company. Matter of Case, 122 App. Div. 343. And where the administratrix was unable to sell the good will of the business of the decedent she can only be charged with what she actually received for the fixtures. Matter of Bollweber, N. Y. Law Journal, May 31, 1905, Surrogate Thomas.

106NY'S

The good will of a business corporation may be considered in establishing the value of its stock. There is no rigid rule for the determination of the value of good will, which must in each case be determined in the light of the surrounding facts. von Au v. Majenheimer, 115 App. Div. 84.

In von Au v. Majenheimer the Appellate Division (115 App. Div. 84) held that as a general rule the value of a good will may be arrived at by multiplying the average net profits by a number of years, to be determined by the nature and character of the business. Good will cannot be determined by the courts as a question of law, but the value thereof is a question of fact, to be determined by a jury upon the evidence before them in each action. In this case the Appellate Division found the value of the good will as determined by the trial court excessive and granted a new trial. In the second trial of this case the jury found the value of the good will to be approximately six times the average annual net earnings, and the court refused to set the verdict aside as excessive. von Au v. Majenheimer, 126 App. Div. 257.

The interest of a deceased partner in the good will of the business is an asset of his estate, in the absence of an agreement to the contrary. In valuing the good will in which the estate of a deceased partner is to share, it should be based on the profits of the business before his death, not upon the profits made thereafter. And the rule adopted by the surrogate in find