tion be increased to three per cent until the value of the right acquired by the beneficiary exceeds, exclusive of the exemption, fifty thousand dollars; and in like manner the rate cannot be increased to five per cent until such value, exclusive of the exemption, exceeds one hundred thousand dollars." The New York transfer tax statute of 1887 contained the proviso "that an estate which may be valued at a less sum than five hundred dollars shall not be subject to such duty or tax." It was contended that under this provision every person receiving a testamentary gift or a distributive share in an estate could claim an exemption of five hundred dollars; if his gift or share was less than five hundred dollars, the whole amount was exempt, and if his gift or share exceeded five hundred dollars, then five hundred dollars was to be deducted therefrom as an exemption. But the court of appeals reached the conclusion that when the inheritance or testamentary gift exceeded five hundred dollars, it was subject to be taxed for its full amount; but that when its value was less than that sum, no tax at all was to be collected." This doctrine should be considered with the New York decisions referred to in sections 133 and 134, ante. It has recently been reaffirmed by the supreme court in construing section 221 of the act of 1910, and holding that a legacy of over five hundred dollars to an adult child of the testator is taxable at one per cent on the entire amount of the legacy, not on merely the excess over and above five hundred dollars, but that a legacy to such child of less value than five hundred dollars passes exempt from taxation." State v. Probate Court, 111 Minn. 297, 126 N. W. 1070; State v. Probate Court, 112 Minn. 279, 128 N. W. 18. 6 Estate of Sherwell, 125 N. Y. 376, 26 N. E. 464. 7 Estate of Mason, 69 Misc. Rep. 280, 126 N. Y. Supp. 998. } Where property outside of the state, belonging to a nonresident decedent, has been used by the executor in the exercise of his right of election to pay pecuniary legacies, and it has proved sufficient for that purpose, and all the property within the state passes to a residuary legatee who belongs to the class taxable at one per cent, the tax at that rate must be imposed upon the personalty passing to him." Under the federal war revenue act of 1898, the amount of each particular legacy or distributive share, not the whole personal estate of a decedent, is the amount on which the progressive rate is imposed; and this, it is believed, is the rule generally applied in construing the statutes of the various states.10 § 226. As Determined by Relationship of Parties.— In the taxation of inheritances it is customary, when lineal descendants and the surviving husband or wife are taxed at all, to impose upon them a lower rate than upon strangers and collateral relatives. Therefore, the degree of relationship, or the absence of relationship, between donor and donee becomes an important matter in computing inheritance taxes. In this connection reference should be made to the preceding section. The general features of this subject, and the constitutional attacks upon them, have been considered in previous chapters.' 11 Where the widow and next of kin, if any, of a decedent are unknown, the presumption is that he has left next of kin but not a widow or descendants. Therefore, it is presumed that his property vested in the next of kin, and it is taxable accordingly. The 8 Estate of Whiting, 69 Misc. Rep. 526, 127 N. Y. Supp. 960, affirmed, 139 App. Div. 905, 124 N. Y. Supp. 1134. 9 Knowlton v. Moore, 178 U. S. 41, 44 L. Ed. 969, 20 Sup. Ct. Rep. 747. 10 See cases previously cited under this chapter; also sec. 205, ante. 11 See secs. 10, 21, ante. transfer is not "dependent upon contingencies or conditions whereby they [the interests] may be wholly or in part created, defeated, extended or abridged." 12 § 227. In Case of Exercise of Power of Appointment. The relationship of the parties, which determines the rate of taxation or whether any tax at all can be assessed, in case of an exercise of a power of appointment, is the relationship existing between the donee of the power and the appointees. This necessarily follows from the rule that the donee is regarded, for purposes of inheritance taxation, as devising to the appointees property of which he is the absolute owner, and that it is his exercise of the power, not the creation of the power, which effects the taxable transfer.13 § 228. In Case of Assignment of Legacy. In the event of a legatee assigning his legacy, the inheritance tax is measured by the legal relation which the legatee bears to the testator; it is not affected by the relation which the assignee of the legatee bears to him.1 § 229. Law Governing in Case of Change of Statute. The rate of inheritance taxation, and hence the amount of the tax to be paid by those succeeding to the estate of a decedent, is determined, in the event of a change in the law, by the statute in force at the time of his death.15 But the method of procedure for the determination and enforcement of the tax is governed by the statute in force at the time of the institution of the proceeding.16 12 Estate of Lind, 132 App. Div. 321, 117 N. Y. Supp. 49, affirmed, 196 N. Y. 570, 90 N. E. 1161. 18 See sec. 85, ante. 14 See sec. 211, ante. 18 Estate of Woodard, 153 Cal. 39, 94 Pac. 242. 16 Estate of Davis, 149 N. Y. 539, 44 N. E. 185. CHAPTER XVI. JURISDICTION OF COURTS. § 235. Of Probate Courts, in General. § 236. In Case of Powers of Appointment. § 237. In Construction of Wills. § 238. In Determining Taxability and Value of Property. § 239. In Issuing Commission to Take Testimony. § 240. In Ordering Production of Corporate Books and Papers. § 235. Of Probate Courts, in General.-Proceedings in the matter of inheritance taxation are usually under the control of those courts which exercise probate jurisdiction, and that court has jurisdiction in any particular case which has jurisdiction of the administration of the estate of the decedent. In the event that two or more courts have jurisdiction, the one first acquiring jurisdiction retains it to the exclusion of every other.1 The New York court of appeals, after quoting the fifteenth section of the act of 1885 which reads, "The surrogate's court shall have jurisdiction to hear and determine all questions in relation to the tax arising under the provisions of this act," said: "Aside from the ordinary jurisdiction of the surrogate, this is a special grant of power in broad and comprehensive language; and there can be no good reason for hampering the power thus conferred by any construction that 1 Dixon v. Russell, 78 N. J. L. 57, 73 Atl. 51; Estate of Wolfe, 137 N. Y. 205, 33 N. E. 156; Estate of Hathaway, 27 Misc. Rep. 474, 59 N. Y. Supp. 166; Estate of Keenan, 1 Con. 266, 5 N. Y. Supp. 200; Estate of Arnold, 114 App. Div. 244, 99 N. Y. Supp. 740. The Connecticut statute contains no direction as to who shall compute the inheritance tax or the manner of computation; but by necessary implication the duty of computation is placed upon the court of probate: Appeal of Hopkins, 77 Conn. 644, 60 Atl. 657. would take from him authority to decide every question that may arise in the proceedings before him which may be necessary in order fully to discharge the duties imposed upon him by the act. Every officer charged with the duty of executing a taxing power, whether it be a surrogate or a town assessor, must necessarily decide, in a judicial capacity, important questions of law, in order to perform the duties of his office.' 992 It has been said that the New York transfer tax act of 1892 and the provisions of the Code of Civil Procedure for the granting of letters upon the estate of a decedent should be read together; and that what is held to be property, within the meaning of that portion of the statute providing that a tax shall be imposed upon its transfer, is also property for the purpose of conferring upon the surrogate's court jurisdiction to impose the tax. It has been decided. further, that shares of stock in a corporation of that state, held by a nonresident testator who died without the state, and taxable under the transfer tax law as "property within the state," are, within the meaning of subdivision 3 of section 2476 of the Code of Civil Procedure, "property within that county" where the corporate property is, and the surrogate's court of that county has, by force of the provisions of the transfer act, jurisdiction to impose the tax. The code section here referred to is the one which prescribes the jurisdiction of the probate court to grant letters testamentary or of administration.3 2 Estate of Ullmann, 137 N. Y. 403, 33 N. E. 480. Estate of Fitch, 160 N. Y. 87, 54 N. E. 701. That the county court in Kentucky has no jurisdiction to impose a tax where a nonresident decedent leaves money in a domestic bank or stock in a domestic corporation, but leaves no real property in the state, see Commonwealth v. Stump, 146 Ky. 132, 142 S. W. 393; Commonwealth v. Cumberland Tel. & Tel. Co., 146 Ky. 142, 142 S. W. 392. |