Appeal from Surrogate's Court, Kings County.
Proceedings for the appraisal of the property of Maria B. Chapman for the assessment of a transfer tax. From an order of the Surrogate's Court of Kings County fixing the tax ( 61 Misc. 593, 115 N.Y.Supp. 981), the State Comptroller appeals. Affirmed.
Testator gave to trustees an undivided share of his estate for the benefit of his daughter for life, and at her death to her appointee, and, in case she failed to make such appointment, then to her lawful issue in the same manner as if she had died intestate owning the property. Held, that the daughter's children living at testator's death took a vested remainder, subject to open and let in after-born children or to be defeated as to each death during the daughter's lifetime without issue or by the daughter's valid exercise of the power of appointment. Order, In re Chapman's Estate (Sur. 1908) 115 N.Y.S. 981, 61 Misc. 593, 7 Mills, 59, affirmed.
[117 N.Y.S. 680] William W. Wingate, for appellant.
Fritz W. Hoeninghaus (James Allison Kelly, on the brief), for respondents.
Argued before WOODWARD, JENKS, GAYNOR, MILLER, and BURR, JJ.
John Davol died in 1878, leaving a last will and testament dated November 21, 1874. There was then no statute in force which imposed an inheritance or transfer tax. Subsequent legislation could not authorize a tax upon the transfer of property effected solely by means of his will. Matter of Pell, 171 N.Y. 48, 63 N.E. 789,57 L.R.A. 540,89 Am.St.Rep. 791.By his will he gave to trustees an undivided share of his estate in trust for the benefit of his daughter, Maria B. Chapman, to apply to her use the interest and income thereof during her life. He further provided that at the death of his said daughter the trustees named in his will were to pay over all property, proceeds, and estate held by them in trust for the benefit of his said daughter " to such person or persons and for such estate and use, and with and under such trusts, powers, limitations, and restrictions and discretion as said daughter shall lawfully by her last will and testament direct, create and appoint. If such daughter should fail to lawfully exercise such power of disposition by her will, or if for any cause a reversion should occur as to the same or any part thereof, they shall pay the same to the lawful issue of such daughter, in the same manner as if such daughter had died intestate owning the same." At the date of his death his daughter had three sons, Edwin N. Chapman, John D. [117 N.Y.S. 681] Chapman, and Harold W. Chapman. Subsequently a fourth son was born, Marvin A. Chapman, and all of these sons survived her. Upon the death of John Davol, Mrs Chapman's sons then living took a vested remainder in that portion of the estate devised and bequeathed in trust for her benefit, subject to open and let in after-born children, or to be defeated by the death of either of said children during her lifetime without issue. Moore v. Littel, 41 N.Y. 66; Matter of Tompkins, 154 N.Y. 634, 49 N.E. 135; Stringer v. Young, 191 N.Y. 157, 83 N.E. 690.This vested estate in remainder was also subject to be defeated by the valid and effective exercise of the power of appointment given to her, provided such power of appointment increased or diminished the estate which her children took under their grandfather's will, or affected in any degree the value thereof. Matter of Lansing, 182 N.Y. 238, 74 N.E. 882.
Under Mrs. Chapman's will, although she in form executed her power of appointment, it did not effectively transfer any property whatever, for her children took from their grandfather precisely what she attempted to give them, and nothing was added to or taken away from the gift by the exercise of the power through her will. The execution of the power left the title where it was before, and the result is the same as if there had been no power to exercise. Matter of Lansing, supra. Under Mrs. Chapman's will, in the fourth clause thereof, she gave and devised the share of her father's estate of which she had received the beneficial income in like division among her sons as she had thereinbefore devised and bequeathed her residuary estate. That residuary estate she divided into four parts, giving one of such parts to each of her sons. This is all of her will that ever became operative. It is true that there was a provision in her will that one of these parts should be held in trust for each of her sons until they attained the age of 28 years (afterwards changed by her codicil so that the period of the termination of the trust was 25 years). Each of her sons was more than 25 years of age at the time that she died. As a general rule a will takes effect from the death of the testator, and not from the date of its execution. This is as true with regard to the execution of a power as with regard to any other provision of a will. Matter of Haggerty, 128 A.D. 479, 112 N.Y.Supp. 1017.It is not necessary to define the exceptions to this rule, since none of them apply in this case. All of the provisions of Mrs. Chapman's will relative to holding any portion of her estate in trust for either of her sons must be construed precisely as though the will had contained this additional clause:
" If at the time of my death all or any of my sons shall have attained the age of twenty-five years, the provisions contained in this my will relative to holding any portion of my estate in trust for him shall cease and be inoperative, and I give and devise the one-fourth of my estate or of the estate of my father in respect to which I have a power of appointment to him absolutely."
That is precisely the estate which was given to them by their grandfather's will. It has been heretofore suggested that the estate which her sons took upon the death of their grandfather, John Davol, was a vested estate in remainder. Even if it were contingent, it was an interest [117 N.Y.S. 682] acquired at the instant of their grandfather's death, and became a property right which could not be cut down by the subsequent imposition of a transfer tax. Matter of Lansing, supra. The suggestion has been made that the children of Mrs Chapman declined to elect whether they would take under their grandfather's will, or under the power of appointment in their mother's will. The election need not be in any particular form, and the position taken by them in connection with the imposition of the transfer tax is a sufficient election if one were absolutely necessary.
I think that the surrogate was right, and the order appealed from should be affirmed, with costs.
JENKS and GAYNOR, JJ., concur.
WOODWARD, J. (dissenting).
John Davol died in 1878, leaving a last will and testament, by the terms of which he created a trust fund of $165,109.18 for the use and benefit of Maria B. Chapman, his daughter, now deceased. This will, which bears date ...