54 N.Y.S. 700 | N.Y. App. Div. | 1898
On the 15th April, 1893, Erastus S. Edgerton, a resident of this state, died intestate at Franklin, in the county of Delaware. He left a widow and two sisters, and a nephew and two nieces, the children of a deceased brother, as his only heirs and next of kin. He had been doing business in the state of Minnesota, and some of his property was there; and letters of administration upon his estate were there taken out by his brother-in-law, Delos A. Mon-fort. Ho administration has been granted in this state. On or about the 31st March, 1888, he made transfers of the greater portion of his property to his sisters and nephew and nieces, and the controversy in this case is over the question whether such transfers are subject to taxation under the act relating to taxable transfers of property (chapter 713, Laws 1887; chapter 399, Laws 1892). He transferred stocks of the estimated value of $78,035 to his sister Mary J. Monfort; taking back from her and her husband, Delos A. Monfort, a joint and several bond in the penal sum of $156,000, dated March 31, 1888. This was conditioned for the performance of the agreements therein stated; and there was a recital that the obligee had transferred, or was about to transfer, to said Mary J., for her own use and benefit, certain securities, a list of which was attached in a schedule, with a valuation in the aggregate as above stated. The obligors thereby agreed to pay or cause to be paid to said Erastus S. Edgerton the sum of $5,500 per annum during his life; the sum of $2,750 to be paid on the 10th July then next, and a like sum every °six months .thereafter. The obligors agreed—
“To deposit as collateral security for the performance of this agreement .the said securities, or the certificates or other evidence thereof that may be received by the undersigned, the said Mary J. Monfort, or such other securities as may be approved of by the said Erastus S. Edgerton, in lieu of the whole or any part thereof; the same to be deposited with the Saint Paul Trust Company, of Saint Paul, Minnesota, and to remain so deposited with the said trust company until the death of the said Erastus S. Edgerton, when the undersigned, Mary J. Monfort, or her executors, administrators, or assigns, shall be entitled to the delivery of the same by the said trust company.”
In case the obligors failed to make any payment for a period of 60 days after it became due, then the trust company was authorized to collect dividends on the securities until sufficient shall have been collected to pay the amount due, or, upon reasonable notice to both parties, sell such portion of the securities as may be necessary to realize a sum sufficient to pay such amount, and then pay the same to said obligee. The obligors agreed, on behalf of themselves and their respective executors, administrators, and assigns, to deposit and keep deposited with the trust company such powers of attorney as may be necessary to enable the trust company to carry out these provisions. It was provided that the obligors should be at liberty, with the consent of the obligee, to sell any of the named securities, and substitute others in their place, to be held by the trust company in the same manner as the original securities. Mr. Edgerton also transferred to his sister Mrs. Monfort other stocks, of the value then of
It appears that Mr. Edgerton had other property, to the amount of about $40,000 or upwards, some of which was thereafter disposed of and transferred by him during his lifetime, and the balance came to the hands of his administrator. In 1888 he was of the age of 72 years, and his wife was of the age of 68 years. He was not in good health, though he was then recovering from an illness. He had made a will, which seems to have been destroyed at or after the transactions of 1888. He was evidently desirous of getting rid of the care of the greater part of the property, and took this method of doing so, and still securing to himself an abundant provision for the needs of himself and wife during their lives.
By chapter 713 of the Laws of 1887, which was in force when these transfers were made, a tax was imposed upon the transfer of any property, “by deed, grant, sale or gift, made or intended to take effect in possession or enjoyment after the death of the grantor or bargainor.” By chapter 399 of the Laws of 1892, which was in force at the time of the death of Mr. Edgerton, a tax was imposed upon any transfer made “by deed, grant, bargain, sale or- gift made in contemplation of the death of the grantor, vendor or donor, or intended to take effect in possession or enjoyment, at or after such death.” Under the act of 1887 transfers to a sister were exempt; otherwise under the act of 1892, unless the estate transferred was less than $10,000. It is argued by the appellants that the act of 1892 is applicable, and that the transfers in question were made in contemplation of the death of the transferror, and therefore within the provision of that act, above quoted. That provision was under consideration in Re Seaman’s Estate, 147 N. Y. 69, 76, 41 N. E. 401, and was construed to refer to grants or gifts causa mortis. The transfers here in question were not such gifts or grants, for there was no power of revocation. Doty v. Willson, 47 N. Y. 585; 2 Kent, Comm. 444; Bliss v. Fosdick, 86 Hun, 162, 173, 33 N. Y. Supp. 317, 151 N. Y. 625, 45 N. E. 1131. In no event was Mr. Edgerton entitled to revoke the transfers or resume the title. He was entitled to the annuities. He could, if necessary, cause a sale of the stock to pay any annuity unpaid, and that was the end of his right. Whichever statute (that of 1887 or of 1892) is deemed to control the case, the question is whether these transfers were intended to take effect in possession or enjoyment at or after the death of the transferror, within the meaning of the law. It appears that the certificates of stock held by Mr. Edger-ton were assigned by him to the respective transferees, and by them surrendered to the respective corporations, and new certificates issued in the names of the respective transferees. These certificates, together with powers of attorney, were deposited with the trust company as required by the bonds, and for the purposes therein mentioned. The transferees, however, received the dividends on the stocks, and voted thereon. In case of the transfers to -Mrs. Monfort and to Erastus D. Edgerton and his sisters, the annuities in fact paid by them were considerably in excess of the dividends. In case of Mrs. Wilcox, the dividends and annuities were about the same. The an
-No particular point seems to be made as .to the provision for a monument, and care of burial lot. Assuming that the transfer covered by that instrument would not be deemed to take effect, in possession, as to the proceeds of the sale of the stock therein mentioned, until the death of Mr. Edgerton, still the provision for a monument is considered' a part of funeral expenses, and so not subject tó the tax, as ordinarily understood. In re Milward’s Estate, 6 Misc. Rep. 425, 27 N. Y. Supp. 286. A bequest for maintenance of the decedent’s burial lot has been held to be exempt, as funeral expenses. In re Vinot’s Estate (Surr.) 7 N. Y. Supp. 517. It appears that the value of the securities covered by the trust deed did not exceed $12,000; that $10,000 was in fact expended for a monument, as therein provided, and $2,000 paid over to the cemetery association therein named, for the purposes therein expressed. This was probably ex
I find no good ground for disturbing the conclusion of the surrogate’s court, and its order and decree should be affirmed.
Order and decree affirmed, with costs. All concur.