Opinion
July 25, 1912.
William Law Stout, for the appellant.
Francis C. Huntington [ David B. Ogden with him on the brief], for the respondent.
On September 18, 1865, Effie (sometimes called Euphemia) Kneeland, who subsequently married Charles C. Haight, executed a deed by which she conveyed to Charles Kneeland and William A. McVickar, their survivor or successors, all her estate, real and personal, upon trust, to collect and receive the rents, issues, income and profits thereof and apply the same to her use during her life. Upon her decease, the trustees were instructed to convey and transfer said estate to such persons, in such proportions and for such estates as she should by her last will and testament devise and bequeath the same. If she died intestate leaving issue her surviving, the trustees were instructed to convey and transfer said estate to her "issue in equal shares in fee simple, the issue of any child * * * who may have died during the lifetime of said party of the first part to take the share of such deceased child." There were further provisions in said deed of trust for the benefit of her brother and sisters if she died intestate and without issue. Subsequently Euphemia Haight gave birth to three children, Charles Sidney Haight, Sarah B. Haight and John McVickar Haight. She had no other children. The youngest of these was born in 1882, and prior to the enactment of the earliest statute of this State relating to taxable transfers. Euphemia Haight died October 26, 1909, leaving her surviving the three children above named. She left a will dated February 13, 1909, and subsequently proved before the Surrogate's Court of Putnam county, which contained the following provision: " First. I give, devise and bequeath all my property, real and personal, of what kind so ever and wheresoever situated, including all property over which I have any power of appointment, to my children, Sarah B. Haight, Charles Sidney Haight and John McVickar Haight, in equal shares. If any of my said children shall die before me either with or without issue, the share which the child so dying would have taken if living at my death, shall be divided equally amongst such of my said children as shall survive me."
The question presented by this appeal is whether the estate received by her three children is subject to a transfer tax. The Comptroller of the State appeals from an order declaring it to be exempt. We think that the learned surrogate decided correctly, and that the order must be affirmed. We are unable to distinguish this case from the cases of Matter of Chapman ( 133 App. Div. 337; appeal dismissed, 196 N.Y. 561) and Matter of Haggerty ( 128 App. Div. 479; affd., 194 N.Y. 550), nor does the learned counsel for the appellant in his able and interesting brief attempt to do so. Upon the execution of the trust deed, the trustees named therein took an estate, during the life of the grantor, in all her estate, real and personal, sufficient to feed the trust. The remainder then vested in her brother and sisters then living, subject, however, to be divested by the birth of her issue. ( Matter of Haggerty, supra.) Upon the birth of her oldest child he took a vested estate in this remainder, subject to open and let in after-born children, or to be defeated by the death of either during her lifetime ( Moore v. Littel, 41 N.Y. 66; Matter of Chapman, supra), and also subject to be defeated by a will executed by her, whose provisions were in conflict with the provisions of the trust deed relating to this vested remainder. Although Mrs. Haight did not die intestate, for she left a will, so far as this estate in remainder is concerned her will never became operative, for the attempted execution of the power over the remainder reserved by her in the trust deed left the estate precisely where it was before, and nothing was added to or taken away from the gift under the deed by the exercise of the power through the will. The result is the same as if there had been no power to exercise. ( Matter of Lansing, 182 N.Y. 238. ) Herein is the vital distinction between this case and Matter of Cooksey ( 182 N.Y. 92), chiefly relied on by appellant. There David Dows by his will created an estate in trust for the life of Linda Dows Cooksey, his daughter, and also created an estate in remainder for the benefit of such of her children, or the issue of such children, as she might by her last will and testament designate and appoint, in such manner and upon such terms as she might legally impose. There was likewise a provision that if she died intestate such estate in remainder should go to her surviving children and the issue of her deceased children per stirpes. Linda Dows Cooksey made a will which became operative, under the terms of which this estate in remainder was given to her children, not absolutely, as provided in David Dows' will in case of her intestacy, and at the times designated therein, but upon entirely different terms and conditions. The exercise of the power by her did alter the terms of the gift, which would have otherwise become operative through her father's will. Necessarily the transfer became effective through her will and not otherwise.
The order of the Surrogate's Court of Putnam county should be affirmed, with ten dollars costs and disbursements.
THOMAS, WOODWARD and RICH, JJ., concurred; JENKS, P.J., not voting.
Order of the Surrogate's Court of Putnam county affirmed, with ten dollars costs and disbursements.