[As to time of payment see further, ante, s. 299 et seq.] Sec. 412. Pecuniary Legacies. In the case of a money legacy the tax may be deducted from it and the balance paid to the legatee. In re Hoyt, 37 Misc. 720, 76 N. Y. Suppl. 504. Sec. 413. Form of Receipts. The receipts should not be so framed in California as to bind the state or conclude its right to have the question reviewed on appeal. The receipt should be only for so much money on account of the tax. The right to obtain a refund of a tax is governed by the law in effect at the time that the proceeding is commenced, and not by the law in force at the death of the testator. In re Coogan, 27 Misc. Rep. 563, 59 N. Y. Suppl. 111. Sec. 415. When. Taxes computed on a mistaken construction of law1or paid as a temporary payment should be refunded. Money paid by executors on a life estate, in ignorance of the fact that the life estate had been terminated by death, may be recovered back by the executors as paid under a mistake of fact. This is not a voluntary payment, as to constitute a voluntary payment it must be made with full knowledge of all the facts and circumstances. Where a beneficiary under misconception of the law advanced the money to pay more than was really chargeable to him, and where the property is sold for the tax, he is subrogated to the rights of the state and should be repaid what he has erroneously paid.1 1 Sherman v. United States, 178 U. S. 150, 152, 20 Sup. Ct. 779. 2 In re Skinner, 106 N. Y. App. Div. 217, 94 N. Y. Suppl. 144, modifying 92 N. Y. Suppl. 972. 3 Kahn v. Herold, 147 Fed. 575, affirmed in 86 C. C. A. 598, 159 Fed. 608, 163 Fed. 947 (under U. S. St. 1898). In re Wilcox, 118 N. Y. Suppl. 254. Sec. 416. Proceedings. Refunding should be accomplished under proceedings expressly provided by statute, only by an official authorized by law, or as an incident of an order vacating a tax,3 and may be ordered even though no appeal from the imposition of the tax was taken.^ The tax may be paid under protest and then action brought for refunding, or refunding may be compelled by mandamus. Where the New York statute of 1896, section 225, as amended by the New York statute of 1897, chapter 284, provides that if the surrogate modifies or reverses his order fixing the tax, the state comptroller shall by order direct and allow the refunding of the tax, a mandamus is the proper proceeding to compel the state comptroller to make the refund." 1 In re Sherar, 25 Misc. 138, 54 N. Y. Suppl. 930, 2 Gibbons 28. Thacher v. United States, 149 Fed. 902. The act of 1887 provides a simple proceeding for the reimbursement of money paid for an inheritance tax and was intended to be exclusive for this object, and therefore the taxpayer has no rights under section 1323 of the code authorizing the appellate court in reversing a judgment to make restitution of property lost by judgment. In re Howard, 54 Hun 305, 7 N. Y. Suppl. 594. In re Hall, 54 Hun 637, 7 N. Y. Suppl. 595. 2 People v. Griffith, 245 Ill. 532, 543, 92 N. E. 313 (state and not county treasurer). See In re Park, 8 Misc. Rep. 550, 29 N. Y. Suppl. 1081 (surrogate may order county treasurer to refund under the act of 1892). 3 The surrogate may refuse to insert in an order vacating an assessment a direction to the state comptroller to refund the amount of the tax. Such an order is entirely proper but is not essential, as the statute itself commands the state comptroller to direct the treasurer of the county or the comptroller of the city of New York to refund. In re Cameron, 181 N. Y. 560, 74 N. E. 1115, affirming 97 N. Y. App. Div. 436, 89 N. Y. Suppl. 977. In re Sherar, 25 Misc. Rep. 138, 54 N. Y. Suppl. 930, 2 Gibbons, 28. The tax was paid on demand under written protest giving the grounds for refusal in Knowlton v. Moore, the case arising under the United States revenue act, the testator being domiciled in New York state. On denial of a petition for refunding action was brought in the U. S. circuit court. Knowlton v. Moore, 178 U. S. 41, 20 S. Ct. 747, 44 L. Ed. 969. 6 In re Coogan, 27 Misc. Rep. 563, 59 N. Y. Suppl. 111. The refunding of a tax carries interest on the amount refunded,1 as in case of taxes paid under an unconstitutional statute.2 1 In re Wilcox, 118 N. Y. Suppl. 254. Contra, Wieting v. Morrow, (Iowa 1911,) 132 N. W. 193, denying the right to interest unless expressly ordered by statute. Interest may be allowed in a suit to recover legacy taxes paid, as it is not in form an action against the United States. Kinney v. Conant, 166 Fed. 720, 92 C. C. A. 410. 2 In re Wood, 91 N. Y. App. Div. 3, 86 N. Y. Suppl. 269. "The tax in question was imposed and collected by the state under color of a law that was absolutely void. It was a void tax and not merely voidable for some irregularity or error, and had no support except an unconstitutional statute. Such a law is simply void. It confers no rights, imposes no duties, confers no power, and in legal contemplation is as inoperative, for any purpose, as if it had never been passed." Per O'Brien, J. Therefore the only question for the court is whether, the comptroller having received the money without right and used it for the purposes of the state under a promise to refund, it was properly charged by the court with interest. The court holds that as the state has promised to refund the tax the obligation to refund money received and retained without right implies and carries with it the right to interest, although section 225 makes no mention of interest while section 256 relating to the repayment of illegal or excessive taxes expressly provides for the payment of interest. In re O'Berry, 179 N. Y. 285, 287, 72 N. E. 109, affirming 91 N. Y. App. Div. 3. Sec. 418. Defences. Estoppel and Limitations. One may be estopped from claiming a refund, or barred by limitations, although a general statute of limitations may not be a bar.3 1 Where a person was named as a life tenant in a will who really was the owner of the property under a deed in his possession and he testifies that he is only a life tenant and does not disclose his ownership under the deed and pays the tax as life tenant, the surrogate court eight years later refuses to allow a refunding of the tax. In re Mather, 41 Misc. Rep. 414, 84 N. Y. Suppl. 1105. 2 An illegal tax was paid in November, 1895, and the law then in force, the statute of 1892, gave the taxpayer five years in which to apply for a refund of any part of the transfer tax. This period had not expired when the statute of 1897, c. 284, went into effect, apparently providing for an unlimited period in which to apply for a modification or reversal of the original order but requiring the application for the refund to be made within one year after such modification or reversal. N. Y. St. 1900, c. 382, limited the period within which both the application for modification or reversal and for a refund must be made to two years. The taxpayer applied to the surrogate in October, 1903, for an order modifying the original order which fixed the transfer tax and the court holds that under section 6, article 7, of the state constitution, which provides that "neither the legislature, the canal board nor any person or persons acting in behalf of the state shall audit, allow or pay any claim which, as between citizens of the state, would be barred by lapse of time," it seems clear that the comptroller could not have audited, allowed or paid this claim even if the two years limitation in the statute of 1900 did not apply. While it is to be observed, moreover, that the statute of 1900, with its two years limitation, is to be treated as purely prospective, the same test must be applied to the act of 1897, in which event the respondent is relegated to the statute of 1892 with its five years limitation which had elapsed by more than three years before he sought relief. In re Hoople, 179 N. Y. 308, 313, 72 N. E. 229, reversing 93 N. Y. App. Div. 486, 87 N. Y. Suppl. 842. 3 In re Sherar, 25 Misc. Rep. 138, 54 N. Y. Suppl. 930, 2 Gibbons 28. |