In Re the Estate of Green

O’Brien, J. In proceedings under the . statute for the assessment of the transfer tax in this case the surrogate reversed his own order which imposed the tax and held that the property was not subject to such payment. The Appellate Division has affirmed the order. Sarah Helen Green, a resident of 27ew York, died on the 21st of May, 1893, leaving a will. Previous to her death, and on the 14th day of February, 1889, she delivered to Frederick Frelinghuysen, as her trustee, over §200,000 of railroad bonds, under a deed or instrument bearing date on that day which, in terms, purported to assign and deliver this property to the trustee and his successors in trust upon the following conditions and for the following *226 uses: 1. To collect the income and apply the same to her use during her life. 2. After her death, to divide and pay over the same and the proceeds among her three nieces, who were named, the issue of either who might die before the donor to receive the share to which the mother would be entitled if living, and in case of the death of either of the nieces before her without issue her share to go to the survivors. The power was reserved to modify the instrument at any time with the consent of the trustee and to appoint a successor in case of his death. The trustee was given power also to sell the property in his discretion and to reinvest the proceeds subject to the same uses and trusts. ‘ The instrument was modified by another executed ¡November 14, 1890, and by another dated October 28th, 1891, both of which were in substantially the same form as the original. The changes made related to the distribution of the remainders among the nieces and their heirs after the death of Mrs. Green, and are not material to the questions involved in the appeal. The trustee accepted the trust, took the property into his possession and deposited the bonds in a box in a safe deposit company, where they remained until the death of Mrs. Green. They then passed in possession and enjoyment to the nieces under the terms of the deed. The question is whether this transfer was subject to the tax authorized by the statute in such cases. The point is made that, since the decision of the Appellate Division was unanimous, the order is not reviewable in this court. We do not perceive that this provision of the Constitution and the statute has any application to such a case. There was no question of fact in controversy. The only question involved was the legal construction of the deed and the statute, and this, of course, was a question of law which this court may review. The act (L. 1892, eh. 399, § 1) provides that the tax shall be paid: 1. When the transfer is by will, or by the intestate laws of *227 this state, from any person dying seized or possessed of the property while a resident of the state. 2. When the transfer is by will or intestate law, of property within the state, and the decedent was a non-resident of the state at the time of his death. 3. When the transfer is of property made by a resident or by a non-resident, when such non-resident’s property is within this state, by deed, grant, bargain, sale or gift, made in contemplation of the death of the grantor, vendor or donor, or intended to talte effect, in possession or enjoyment, at or after such death. Such tax shall also be imposed when any such person or corporation becomes beneficially entitled, in possession or expectancy, to any property, or the income thereof, by any such transfer, whether made before or after the passage of this act. There are some questions discussed at length upon the briefs of counsel which, in the view we take of the case, are not very material to the disposition of the appeal. It is not important to determine whether the trust instrument was made in contemplation of death, or whether, upon the delivery thereof, the remainders vested in the nieces in such a sense as to constitute a gift inter vivos within the meaning of the cases cited by the learned counsel for the respondent. It may be conceded that upon the delivery of the trust deed an interest in remainder vested in the nieces subject to open and let in the children of one who had died during the lifetime of the donor, according to the terms of the instrument. The real question is, whether the remainders which the nieces took under the deed, were intended to “ taJee effect, in possession or enjoyment,” at or after the death of the donor. Until her death, they had no actual possession, or right to the possession, of the property. Since they could not receive any part of the principal or the income till after her death, their right of enjoyment was postponed till the happening of that event. Whatever interest they may have had before, the right to the possession and enjoyment depended upon the death of the donor. We think it quite clear that the remain *228 ders were transferred to the nieces, in possession or enjoyment, by an instrument intended to take effect for that purpose, at or after the death of the donor, and so the case is brought within the terms of the statute. It matters not whether the transfer is by grant or by gift so long as it was intended to take effect, in possession or enjoyment, at or after the death of the grantor or donor, the devolution of title is subject to the tax. The death of the donor was the event which made the transfer complete and effective and secured to the nieces the possession and enjoyment of the property. (In re Seaman, 147 N. Y. 77.) The property was within this state and the transfer was by a resident. The nieces take the remainders in possession or enjoyment under the laws of this state and under an instrument made here. It is not important, therefore, whether they now reside here or elsewhere. The question considered by the courts below was whether the transfer in its nature and character was within the statute and we think it was. These views require a reversal of the order appealed from as well as the second order of the surrogate. The first or <pro forma order of the surrogate is correct in principle and should be affirmed if correct in detail, but since it is admitted bv the counsel for the comptroller that there was an error in the adjustment of the amount of the tax against the respondents or some of them, all the orders should be reversed and the proceedings remitted to the surrogate for his further action in accordance with this opinion, without costs to either party. All concur, except Gray, J., absent. Orders reversed. •