The opinion of the court was delivered by: BYERS
The plaintiffs, as executors of Ella V. von E. Wendel, seek judgment to recover $17,674.50, with interest from December 1, 1936, representing the aggregate amount of United States documentary stamps affixed to six deeds conveying the residuary real estate formerly the property of the decedent (and passing under the Twenty-third paragraph of her will to fourteen charitable, benevolent, educational or religious corporations) to Wendel Foundation, a charitable membership corporation duly created by Chapter 947 of the Laws of 1935 of the State of New York.
The right to claim refund was appropriately reserved.
The sole question for determination is whether such stamps were required so to be affixed under the appropriate provisions of Title VIII, § 800 et seq., Schedule A 8, of the Revenue Act of 1926, as amended, namely: "Deed, instrument, or writing * * * whereby any lands, tenements, or other realty sold shall be granted, assigned, transferred, or otherwise conveyed to, or vested in, the purchaser or purchasers, or any other person or persons, by his, her, or their direction, when the consideration or value of the interest or property conveyed * * * exceeds $100 * * *." 26 U.S.C.A.Int.Rev.Code, § 3482.
At the trial no contention was offered that there was any deficiency in stamps, from which it must be assumed that the appraisal of the value of the said residuary real property was deemed to be adequate and sufficient.
The essential evidence has been stipulated and may be thus summarized:
The residuary portion of the decedent's will, as far as presently material, reads as follows:
"Twenty-third: All the rest, residue and remainder of my estate, of whatsoever the same may consist and wheresover situate, including any and all legacies and devises which may lapse or for any reason fail to take effect, I give, devise and bequeath to my sister Rebecca A. D. Wendel Swope, to have and to hold the same for and during the term of her natural life; and upon the death of my said sister Rebecca A. D. Wendel Swope, or in case of her death before me then upon my death, I direct my Executors to divide all the rest, residue and remainder of my estate into Two hundred equal shares or parts, and I give and bequeath the same as follows:"
Then follows the allocation of the two hundred shares to and among fourteen corporate beneficiaries.
The sister of the testatrix did predecease her, so that when the testatrix died on March 13, 1931, a resident of the County of New York, the contemplated life estate never arose.
It must be taken as established that the convenient and expedient consummation of the testamentary purposes called for the creation of a single and coherent instrumentality of administration to prevent an unwarranted sacrifice of the intrinsic values of the extensive real estate holdings of the testatrix. Such was the common understanding promptly arrived at by the various eleemosynary institutions constituting the beneficiaries, and accordingly they caused to be introduced in the New York State Legislature an Act to incorporate Wendel Foundation, which became a law on May 16, 1935, with the approval of the Governor.
Its title is: "An Act to facilitate the management and liquidation of real properties given to certain charitable, benevolent, educational and religious corporations by Ella V. von E. Wendel and by Rebecca A. D. Wendel Swope, and for that purpose to incorporate Wendel Foundation."
The purposes are defined in § 2 as follows: "§ 2. The purposes and objects of the foundation shall be, and it shall have power, to receive, take, hold, own, manage, operate, lease, mortgage, improve, sell, assign, exchange, transfer, convey, and otherwise deal in all or any part of or any interest in the lands, tenements and hereditaments and other real property and appurtenances, and personal property used in connection therewith, at any time a part of the residuary estates of Ella V. von E. Wendel, who died March thirteen, nineteen hundred thirty-one, and whose last will and testament was admitted to probate in New York county on June twenty-ninth, nineteen hundred thirty-three, and of Rebecca A. D. Wendel Swope, who died on July twentieth, nineteen hundred thirty, and whose last will and testament was admitted to probate * * *, and to receive the rents, issues, profits and proceeds thereof, and from time to time to pay over the net income therefrom and the net proceeds of the sale of any part thereof, after reserving a reasonable and proper working fund for the further operation of the foundation, to the several charitable, benevolent, educational and religious corporations, respectively, named as residuary beneficiaries in said last wills and testaments which shall have conveyed their several interests in said property to the foundation, hereinafter called the 'constituent corporations', as their respective interests shall from time to time appear, and finally to liquidate all of said property, by sale or otherwise, and distribute the same, or the proceeds thereof, and all income therefrom, to the then constituent corporations as such interests shall appear. The power and capacity of the foundation to take and hold property shall be without limitation as to the amount or value of the property or the income therefrom."
§ 3 provides that each constituent corporation shall choose one member of the foundation, and the members so chosen shall be individuals and constitute the successors of the persons named in section 1. Each member is entitled to cast one vote for each one-two hundredth share in the residuary estate of the decedent (that being the unit of participation in the residuary estate, as shown).
The other provisions of this section are not presently material.
§ 4 provides for the creation of a board of trustees and sundry administrative matters pertaining thereto.
§ 5 contains the following: "The foundation may purchase the pro rata share of any constituent corporation in the property of the foundation, upon the consent in each instance of such constituent corporation and of members of the foundation then entitled to cast nine-tenths of the total authorized vote. Upon the consent in each instance of the members of the foundation then entitled to cast nine-tenths of the total authorized vote, the foundation may purchase all or any part of the interest in the residuary estates of said Ella V. von E. Wendel and Rebecca A. D. Wendel Swope of any beneficiary not a constituent corporation. Upon the final consummation of any such purchase, the residuary beneficiary whose share or interest is so acquired shall not thereafter become a constituent corporation, or if it has been a constituent corporation, it shall cease to be a constituent corporation, and the office of its member and alternate member shall terminate, and its ...