In re the Appraisal of the Property of Baker

Adams, P. J.: It is conceded that the decedent was a resident of this State, and the only question involved in this appeal is the construction to be given to subdivision 3 of section 220 of the General Tax Law (Laws of 1896, chap. 908, as amd. by Laws of 1897, chap. 284), which provides for the imposition of a transfer tax, “ when the transfer is of property made by a resident * * * 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.” It will doubtless be conceded that the respondent’s claim is not one which is dependent for its validity upon a deed or grant of any [533] kind, and, furthermore, that it is not testamentary in its character, although it did not become due and payable until after the death of her husband. It was simply the outgrowth of a contract entered into between the decedent and the claimant, which was founded upon a perfectly good and valuable consideration, and one which is regarded with favor by the law and will generally be enforced in accordance with the intention of the parties. (Johnston v. Spicer, 107 N. Y. 185; Peck v. Vandemark, 99 id. 29; White v. White, 20 App. Div. 560.) It would seem to follow, therefore, that a claim arising from such a source is in the nature of a debt against the estate and as such enforcible like any other debt (Hegeman v. Moon, 131 N. Y. 462; Warner v. Warner, 18 Abb. N. C. 151); and if this is its character we do not see why it should be subject to taxation under the Transfer Tax Law any more than if it were a debt represented by a bond or note. The tax imposed by the statute in question is a tax on the right of succession and not on the property itself (Matter of Dows, 167 N. Y. 227); and “ a payment of an obligation dependent upon a valuable consideration is not a succession in any sense.” (Goodrich, P. J., in Matter of Miller, 77 App. Div. 473, 481.) But it is said that the contract was entered into in contemplation of and was not “ intended to take effect in possession or enjoyment ” until after the death of the obligor. This, in a certain sense, is doubtless true, as it would be of any other form of debt the payment of which was deferred until after the death of the debtor, but this does not affect its validity nor alter its character. (Hegeman v. Moon, supra.) Neither, in our opinion, does it subject the debt to taxation under the act in question, unless it can be shown that the agreement was entered into in bad faith and with some evasive intent. (Matter of Bullard, 76 App. Div. 207, citing with approval Matter of Spaulding, 49 id. 541.) This court has held that the words “in contemplation of the death ” do not refer to that general expectation which every mortal entertains, but rather the apprehension which arises from some existing condition of body or some impending peril (Matter of Spaulding, supra; affd., 163 N. Y. 607); and this we believe is [534] now the generally accepted definition of the phrase. (Matter of Seaman, 147 N. Y. 69, 77; Matter of Mahlstedt, 67 App. Div. 176, 178.) There is nothing in the case under discussion to lead'us to suppose Ithat the ante-nuptial contract to which reference has been made was -entered into with any design to evade the law or that its provisions for the benefit of the respondent were made in contemplation of death, within the meaning of that term as we understand and have defined it. The decedent was not ill at the time it was executed, and for aught that appears he expected to enjoy the matrimonial relation into which he was about to enter for many years. His obligation, therefore, as was said in Matter of Miller (supra), was entered into “ in contemplation of life ” rather than of death.' Such being the clearly established intent of the parties, it necessarily follows, in our interpretation of the scope and meaning of the act, that the decision of the learned surrogate is correct and should be affirmed. All concurred. Decree of Surrogate’s Court affirmed, with costs.