Opinion
January, 1914.
Harry F. Mela, (Samuel C. Steinhardt, of counsel), for executor.
Thomas E. Rush, for state comptroller.
I have delayed deciding this matter too long, but it involves a point of some nicety. In the testator's will it is provided in the clause marked "fourteenth" as follows: "I hereby release and discharge my son, Louis Hirsch, of and from any and all claims and demands of every nature which I may have against him at the time of my death." The transfer tax appraiser in his report on said estate found that this disposition of the testator when put into effect became a transfer of property under the law and is therefore taxable. From his report and the order entered thereon the executor appeals. From said report it appears that the testator and his said son had been copartners in business, and that upon the dissolution of this copartnership the son had given to his father "a sealed instrument," in which he agreed to discharge the indebtedness due his father growing out of said copartnership. It further appears that at the time of testator's death there was a balance due to him growing out of this transaction, to wit, the sum of $27,866.67. This was the amount of money disposed of as shown by the said clause "fourteenth" of testator's will, and the transfer of which was held to be taxable as a transfer of property. The appellant contends that, inasmuch as the passage of this property was by means of a release and discharge, it was not such a transfer of property contemplated by the statute as would make it taxable. In Matter of Wood, 40 Misc. 155, Surrogate Thomas said: "The first clause of decedent's will is, in part, as follows: `I hereby direct my executor, hereinafter named to withdraw one-half of each of the claims and demands which have been presented by me, or on my behalf, to the executrix of the will of my deceased brother, Benjamin Wise, and not to collect any more than one-half of the same from said executrix, and I hereby forgive one-half of said claims and demands against my said brother's estate.' The claims referred to were two promissory notes made by said brother, and the above provision may be regarded as a bequest. To constitute a bequest it is not essential that a testator use the word `give' or `bequeath' or any other word of similar significance." In Matter of Wood the use of the work "forgive" was held to convey the same meaning as the word "bequeath" or the word "give" as ordinarily used, and hence the words "release" and "discharge" must be regarded as so used in the fourteenth clause of the testator's will. In the case at bar the financial condition of the son, Louis Hirsch, is certainly improved to the extent of $27,866.67 by the provision of his father's will and the latter's estate to that amount diminished. The result in any proper view of it, as it seems to me, was simply a transfer within the contemplation of the Transfer Tax Act. The transfer tax appraiser's report and the order entered thereon are affirmed and the appeal therefrom dismissed.
Decreed accordingly.