Case Name: In the Matter of the Appraisal of the Property of the Estate of George Hess, Deceased, under the Acts in Relation to Taxable Transfers of Property. Otto Kelsey, as Comptroller of the State of New York, Appellant; Silas L. Strivings, Individually and as Executor, etc., of George Hess, Deceased, and Mae L. Strivings, Respondents
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1906-01-03
Citations: 110 A.D. 476
Docket Number: 
Parties: In the Matter of the Appraisal of the Property of the Estate of George Hess, Deceased, under the Acts in Relation to Taxable Transfers of Property. Otto Kelsey, as Comptroller of the State of New York, Appellant; Silas L. Strivings, Individually and as Executor, etc., of George Hess, Deceased, and Mae L. Strivings, Respondents.
Judges: 
Reporter: Appellate Division Reports
Volume: 110
Pages: 476–487

Head Matter:
In the Matter of the Appraisal of the Property of the Estate of George Hess, Deceased, under the Acts in Relation to Taxable Transfers of Property. Otto Kelsey, as Comptroller of the State of New York, Appellant; Silas L. Strivings, Individually and as Executor, etc., of George Hess, Deceased, and Mae L. Strivings, Respondents.
. Fourth Department,
January 3, 1906.
Tax Law — when conveyance on covenant to support grantor not subject to. transfer tax.
A deed of farm lands which reserves to the grantor and Ms wife the-right to-, reside on the farm so long, as they shall live, with the right to harvest the crop then sown and to sell wood then- cut, and in which the grantees Covenant that they will-support the'grantor and his wife so long as they shall live and will not sell the farm during the lives of the grantor and liis wife, conveys a present title to the .grantees,.and is not a conveyance in contemplation of death or intended to take effect in possession after death' and hence is not liable to a. transfer tax. . . ” .
McLennan, P. J., and Williams, J:, dissented, with opinion.
Appeal by Otto Kelsey, as Com ptroller of the State of Hew York, - from an order of the Surrogate’s Court qf Wyoming county, entered-, in said- Surrogate’s Court on the 10th day of July, 1905, affirming an Order theretofore made in the proceeding exempting certain real property from taxation, with notice"of an intention to-bring up for review upon such appeal-an order entered on the- 12th day of - June, 1905, reopening the above-entitled proceeding and allowing further - evidence to he taken. ' - v •
Frank K. Cook and L. A. Walker, for the appellant.
Irving G. Botsford, for the respondents.

Opinion:
Spring, J.:
On the 20th day of February, 1904, Silas L. Strivings, who was the party of the first part, and George Hess, party of- the second part, entered into a written agreement whereby Strivings agreed to remove with his wife to the farm of Hess in the town of Castile, occupying the dwelling in common with Hess and his wife, supporting and caring for them during their natural lives. Strivings agreed to " reside upon and work " said farm as long as said Hess " and his said wife, or either of them, shall live." By the terms of the contract the party of the second part was to harvest and thresh the wheat growing upon the farm, using whatever remained beyond the needs of the farm and the family use for his own benefit. The party of the first part was to market the " salable wood now cut on said premises " for the benefit of said second party and was also to sell " any surplus of grain not needed for use."
In consideration of the agreement it was provided that Hess " does hereby grant and convey, subject to said agreements, to said Silas L. Strivings and Mae L. Strivings, his wife," the farm mentioned, describing it by metes and bounds, together with the stock and personal property thereon. The " right to support, maintenance and residence on said " farm was reserved-during the life of said Hess and his wife,, and Strivings and his wife agreed not to sell said premises during the lifetime of the grantor or his wife.
On the same day that this contract was executed Mr. Hess executed his last will and testament, bequeathing the bulk of his property, amounting to about $70,000, to Mrs. Strivings, appointing Silas L. Strivings executor thereof, and also in said instrument ratifying and confirming the agreement now under consideration.
We think that by this agreement and conveyance it was intended to vest the absolute title and immediate possession of said premises in the Strivings, subject to the maintenance of the grantor and his wife. There was no limitation upon the control and management of the farm and personal property or the benefits accruing, therefrom, except in the minor particulars referred to. and which will be adverted to later. It was, therefore, a contract and conveyance founded /upon a good consideration, to wit, the care and mainte nance of these old people until the death of the last survivor, with the enjoyment of, the premises to commence on or before the - first of April after the.execution of the instrument.'
Strivings and his wife went into .the possession of the farm in March, 1904,, and were in the occupancy, thereof wlien Hess, who ivas eighty yeai-s of age, died in August of that year, leaving him , surviving his wife eighty-three-years of age, but no descendants in the lineal line.
Subdivision 3 of section 220 of the Tax Law " (Laws of 1896, chap. 908, as amd. by Laws of 1897, chap. 284) imposes a tax upon the transfer of property by deed, grant, bargain, sale or gift, when "rnazdp 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." . - '
There is no suggestion that the conveyance was-in .contemplation of death. The apprehension of impending dissolution which this clause signifies did not exist. (Matter of Baker, 83 App. Div. 530 ; Matter of Spaulding, 49 id. 541 ; affd., 163 N. Y. 607.)
We also think it is clear that the transfer does not come within the compass of. the other provision of the statute. The acts which , Strivings was to perform.with reference to the sale of certain prop erty on • hand, when lie went,into possession were required in view of the fact that-Hess had already brought the personal property into being, and it was property which should be converted into cash, He had Cut the wood and had gathered the surplus grain. It was not the product of the labor of Strivings and even then no surplus was created until after the stock had been fed arid the needs of the fann provided for. Nor did it relate to. any crops growh after Strivings became.'vested of the title and possession. These limitations, meager as they are, pertain to personal property,, and the possession and enjoymerit of the same for the benefit of the farm and stock of Strivings are not restricted or interfered with. The possession of the farm is. not limited at ally Strivings was in-control all the time.
There was no joint occupancy or control of the farm. Mr. Hess reserved the right to reside on the premises " as hereinbefore provided," that is, he and his wife were to occupy the "dwelling house in common " with the Strivings. That was the extent of the possession reserved, and the products and stock belonged to the grantees and these products comprised the income from the property transferred.
The support and maintenance of Hess and his wife were not dependent upon the farm. If its avails were inadequate to provide for them, the obligations still existed upon Strivings. The support and maintenance were entirely disconnected with the management of the farm, but constituted one of the chief considerations for the conveyance and transfer.
If the title did not vest imipediately upon the delivery of possession, the restriction upon the sale of the farm during the lifetime of the grantor or his wife is meaningless. If they had no title, they could.not convey, and the mere fact that the grantor insisted upon the ownership remaining in. the Strivings while he and his wife lived indicated that he expected he had'parted with the title-absolutely and to become effective at once. '>
The conveyance is made " in consideration of the foregoing covenants and agreements by the party of the first part" and "subject to said agreements." Support is sought to be found in these clauses, particularly the last one, for the contention that there is no immediate vesting of the title. The agreements referred to are chiefly the common occupancy of the dwelling house and the " support, board and care " of Hess and his wife. These are, at the utmost, by the language employed made chargeable upon the premises. When a conveyance is made " subject " to any lien or burden the title passes unqualifiedly. If the conveyance had been subject to the annual payment of $500 to Hess and his wife during lifetime, the vesting of the title would not have been delayed. If there had been a failure to pay the. specific sum, the grantor could ' not reacquire the premises. He could enforce his claim. If there had been a breach in failing to support Hess or his wife or in any of the covenants undertaken by Strivings, the possession and ownership would not have been revested in Hess. The title had passed from him for all time, but he had imposed upon it certain burdens or obligations in the nature of liens. The title or possession was unaffected by the impositions cast upon the' grantees. There was no right to revoke the. conveyance in Hess. The covenant to support and maintain Hess and his wife was a' personal one, and for its breach an action for damages would lie, or one,in ecjuity to have the-necessary sum therefor determined and ma.de a charge upon the premises. (Redpath v. Redpath, 75 App. Div. 95 ; Stehle v. Stehle, 39 id. 440.)
Had Hess desired to prevent title passing until the death of himself ancMiis wife and dependent upon.performance of certain conditions by the Strivings, lie would have made an agreement of that kind instead.of executing a conveyance absolute in form, accompanied by possession and without any restrictions relating to the management of the farm or the. disposition of its proceeds.
The title to these premises does not .hang suspended awaiting. the caprice of this old lady, Mrs.. Hess, ' If the board or _ clothing or attention furnished does not exactly suit her whims.-, she cannot te'r- . minate the interest of the grantees, and summarily eject them from-the premises.
If'the widest latitude is given tó this conveyance to .protect -the grantor and his wife, the ownership was transferred by' the deed subject to be defeated at their instance upon failure to perform by the grantees. ' If such be the construction,'and to which. I do. not assent, the title became absolute in .the Strivings. The only manner in which they can be dispossessed and deprived of their freehold, if that version is to prevail, is by a judgment based upon non-performance 'by them. Even with - that interpretation of the conveyance there is no support for the position that the transfer was " intended •to take effect in possession or enjoyment at or after'' .the death of Hess and his wife. . .
The tax imposed in pursuance of this act is upon the right of succession, not upon property (Matter of Dows 167 N. Y. 227), affecting voluntary transfers, those not founded on a good consideration. (Matter of Miller, 77 App. Div. 473, 481 ; Matter of Baker, 83 id. 530 ; affd. on opinion below, 178 N. Y. 575.)
In Matter of Thorne (44 App. Div. 8) Joseph Thorne transferred property of considerable value, to Eunice Hoff, impressing the same with'a trust for his care'during his lifetime, and she.was to furnish him money as he needed, it. The court held her title absolute^ and the- transfer was not subject to the payment of the transfer tax, . To the same effect is Matter of Edgerton (35 App. Div. 125 ; affd., 158 N. Y. 671)
The cases relied upon by the counsel for the appellant are not analogous. ' In Matter of Brandreth (169 N. Y. 437) the donor transferred shares of stock to his daughters upon the express agreement that he was to receive all the dividends declared on the stock during his lifetime, with the right to vote upon the stock " the same as though no transfer had been made." The "beneficial enjoyment of the stock was, therefore, postponed until his death. He retained the life estate or use while the remainder passed to the beneficiaries only upon his death. The gift was not "intended to take effect in possession or enjoyment " until after the death of the donor, and was, therefore,- taxable.
So in Matter of Cornell (170 N. Y. 423) the donor Reserved the right to use whatever of the net income accruing from the securities transferred he-desired, and also the right to dispose of $10,000; of the property assigned.
The dividing line between those cases and the present one is well defined. In the present case the title in possession and the use of the avails and the increment passed to 'the grantees'. In the other class of cases the beneficial enjoyment did not commence until the death of the donor and there is also the further fact that the conveyance to the Strivings -was for an adequate consideration. In each of the cases mentioned the transfer was unquestionably a gift, and' it is to that class of transfers to which this tax relates. (See Cases-cited gupra.)
The order should be affirmed, with costs.
Hiscock and Hash, JJ., concurred, the latter- in a separate memorandum; McLennan, ' P. J., dissented in an opinion; WiLtiÁHs, J., dissented.