New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1900-05-20
THE GIFTS NOT TAXABLE.
ELBRIDGE C. SPAULDING'S ESTATE
SAVES THE ASSESSMENT
ON S1,5OOOOO

BY recent decision of the Appellate Division Of
the Supreme Court In the Fourth Department.
the State loses the inheritance transfer tax on
s1,5OO,0O0 OF the estate OF Ebridge G. Spauldng,
banker, who died in Buffalo in 1897, leaving an es
tate valued at about s45000CO. There is a strong
dissenting opinion in the case by two of the five
Justices composing the court, and incidentally In
the course of the decision attention is called to
the efforts which have been made ever since the
statute passed evade making payments
under it.
Early in the experience of those who were
charged with the duty OF collecting the transfer
tax 1t was discovered that popular way of
evading taxation by making an 'ante-mor-
tenn disposition of the property. This was ac-
complshed in many ways, chiefly by creating a
trust which should only take complete effect
upon the death of the person creating the trust
fund 1t was found necessary, therefore, to in
sert in the statute provision taxing transfer
by deed. grant, bargain, sale or gift made in con-
temptation of the death of the grantor, vendor or
donor. 1t under this provision of the statute
that the State authorities contended that two
gifts to his children by Mr.. Spaulding not long
before his DEATH amounting to about s1.5oo,o0
should be taxed.
At the time Of his death, May 5. 1897, Mr.
Spaulding eighty years old, and it is
said, in the opinion of the Court that up to two
months prior to his death he had never required
the attention of physician Prior to 1895 he had
been exceedingly strong. healthy and robust
man. In that year, however, he showed signs OF
1885 Mr.. Spaulding called his Edward X. into
his banking office and told him. in substance, that
he had become a very old man and his estate was
burden to him. He further said that he intended
ultimately give his estate to his children. and
he had decided to give some Of 1T to them at that
time Accordingly he gave to Edward securities
amounting in value to s1,O3S 800. to be divided be-
tween himself and two other children equally.
Subsequently. in July. 1886. Mr.. Spaulding re-
peated the substance of his former conversation to
Of NC
children $4,000, and thereupon he gave to Edward
sufficient securities to make up that amount TO
each of the three children. Edward R. and Samuel
S. Spaulding and Charlotte S. Subway making
s, 10000 In all.
The State authorities alleged that this was gift
'fn contemplation of death" within the meaning
of the statute. and this the question which
the Court called upon to decide. The opinion
of the Court written by Justice McLennnu.
and Justices Adams and Mclaughlin concurred.
The dissenting opinion written by Justice
Spring. with whom Justice Williams concurred,
Justice McLennan says:
man Of middle age. in full health and strength:
his wife for the purpose of securing her against
want in case Of his death and declare such puT
veyance would be made in contemplation of death,
after the property would not be subject to the
tax and this is SO I'll the transaction
is in the precise words of the statute
the to at ea m aaSe a the m f
gifts in question were made that he in imned-
danger of death. The evidence duly tends to
show that he old man, somewhat enfeebed,
gradually declining in physical power Whether he
to live one, two or five years he did not know
and could not have known that he to die
Immediately within few days he had reason
to expect; that he to die within few years he
knew to a certainty.
The Court decides therefore, that this was not
gift causa morris. and not such gift 'in
contemplation of death the statute intended
In his dissenting opinion Justice Spring makes
some pointed remarks, and says among other
things:
If Mr.. Spauding was coverty striving to keep
from the taXgatherer this large property he would
not proclaim that purpose from the housetops
We must gather his intention from the circum-
stances surrounding the transaction. He had large
means; he was very DID, he was shrewd economi-
cal and evidently inimical to the visits of the
of his property. but now, with death at hand, the
and he sought to place portion OF his large prop
erty beyond the reach Of this tax. offensive to
men of his mould He would not transfer it all.
The boarded wealth of a long life could not all be
turned over to his children: The acumen and fru-
galty of the aged financier. however, dis
closed in the fact that when he delivered the bonds
terest until January l, 1897 He did wish to
gifts contingent upon his death, but he did in a
ing the income to himself.