Case Name: In the Matter of the Transfer Tax upon the Estate of John C. Klatzl, Deceased. The Comptroller of the State of New York, Appellant; Mary E. Klatzl et al., Individually and as Executrices, Respondents
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1915-10-12
Citations: 216 N.Y. 83
Docket Number: 
Parties: In the Matter of the Transfer Tax upon the Estate of John C. Klatzl, Deceased. The Comptroller of the State of New York, Appellant; Mary E. Klatzl et al., Individually and as Executrices, Respondents.
Judges: 
Reporter: New York Reports
Volume: 216
Pages: 83–95

Head Matter:
In the Matter of the Transfer Tax upon the Estate of John C. Klatzl, Deceased. The Comptroller of the State of New York, Appellant; Mary E. Klatzl et al., Individually and as Executrices, Respondents.
Real property — husband may convey to himself and wife as “tenants by the entirety” — on death of husband transfer tax assessable on one-half of value of property.
1. The creation of a tenancy by the entirety is permitted by law and a husband may by conveyance to himself and his wife create such a tenancy, thereby reserving to himself the same rights he would have under a deed from a third person. (Per Willard Bartlett, Oh. J., Hiscock, Collin and Cardozo, JJ.)
3. Where a husband conveyed real property to himself and his wife “as tenants by the entirety,” upon the death of the husband his one-half interest became subject to .a transfer tax. (Per Willard Bartlett, Ch. J., Guddeback, Hogan and Sbabury, JJ.)
Matter of Klatzl, 166 App. Div. 931, reversed.
(Argued May 36, 1915;
decided October 12, 1915.)
Appeal from an order of the Appellate Division of the Supreme Court in the first judicial department, entered January 29, 1915, which affirmed an order of the New York County Surrogate’s Court assessing a transfer tax upon the estate of John C. Klatzl, deceased.
Alexander Otis, Schuyler C. Carlton and Lafayette R: Gleason for appellant.
The deed in question did not create a tenancy by the entirety but did create a tenancy in common. (Bertles v. Nunan, 92 N. Y. 152; Zorntlein v. Bram, 100 N. Y. 12; Stelz v. Shreck, 128 N. Y. 263; Hiles v. Fisher, 144 N. Y. 306; Dressler v. Mulhern, 77 Misc. Rep. 476; 1 Washburn on Real Property [8th ed.], 529.) If any joint interest passed to Mrs. Klatzl by the deed it was taxable as a gift to take effect at death. (Saxon v. Saxon, 46 Misc. Rep. 202; Matter of Keeney, 194 N. Y. 281; Matter of Green, 153 N. Y. 223.)
John Francis O’Neil for respondents.
A conveyance to husband and wife creates an estate by the entirety, unless an intent to create a different estate is expressed: (2 Blackstone’s Comm. 182; Bertles v. Nunan, 92 N. Y. 152.) A person by a deed may convey real property to himself and wife as tenants by the entirety. (L. 1896, ch. 272, § 26; Hiles v. Fisher, 144 N. Y. 306; Colson v. Baker, 42 Misc. Rep. 407; Matter) of de Escoriaza, N. Y. L. J., Nov. 5, 1914.)

Opinion:
Seabury, J.
John C. Klatzl, a resident of this state, died February 7th, 1913, leaving him surviving his widow, Mary Emma Klatzl, and a daughter, Emma M. Klatzl, who are the respondents in this proceeding. . By his will the deceased gave all of his property in equal shares to his wife and daughter. On February 16th, 1906, the deceased executed a deed to the premises No. 323. East Seventy-fifth street in the city of New York. The consideration expressed in the deed was $100. The deed provides : " This indenture made the 16th day of February in the year nineteen hundred and six between John 0. Klatzl of the Borough of Manhattan, City, County and State of New York, party of the first part, and the said John C. Klatzl and Mary Emma Klatzl, his wife, of the same place as tenants of the entirety, parties of the second part. "
The tax appraiser reported to the surrogate that the 9-alue of the real estate was $12,000, and that it passed bo the respondents herein subject to the transfer tax. An order was entered fixing the tax upon the basis of the report of the appraiser. The respondents appealed to the surrogate from so much of the report and order entered thereon as adjudged that the real property was subject to taxation under the Transfer Tax Law. The surrogate reversed the order fixing the tax upon the ground that the deed from the deceased to himself and wife created a tenancy by the entirety and that Mrs. Klatzl, therefore, succeeded to the entire property by reason of the deed and that the transfer was not subject to taxation under the will. The order of the surrogate was affirmed by the Appellate Division. It is necessary to determine what estate in the property Mrs. Klatzl acquired by virtue of the deed of her husband and whether any interest in that real property passed to the respondents under the will of the deceased which is subject to the transfer tax. It is claimed that the, deed from the deceased to himself and wife created an estate in the deceased and his wife as tenants by the entirety. At common law a conveyance by a third person to husband and wife creates a tenancy by entirety. Such an estate is founded upon the ancient principle of the common law which regarded the husband and wife as One person. (Blackstone's Comm, book I, p. 442; Bl. Comm, book II, p. 182; 2 Kent's Comm. p. 132.) Neither the provision of the Revised Statutes that< ' every estate granted or devised to two or more persons, in their own right, shall be a tenancy in common, unless expressly declared to be in joint tenancy" (3 R. S. [7th ed.] 2179), nor the legislation that has been enacted in reference to the rights and property of married women and permitting husband and wife 'to contract directly with one another, preclude the creation of a tenancy by entirety. After some fluctuation of opinion (Meeker v. Wright, 16 N. Y. 262) it is now settled that this tenancy is still recognized in the jurisprudence of this state. (Bertles v. Nunan, 92 N. Y. 152; Zorntlein v. Bram, 100 N. Y. 12; Stelz v. Shreck, 128 N. Y. 263.) The learned surrogate was of the opinion that as section 56 of the Domestic Relations Law permitted husband and wife to convey directly to one another the effect of the conveyance by the husband "to himself and wife as tenants of the entirety was to make her a tenant of the entirety with him. " This decision seems to us to ignore the principle upon which the common-law doctrine of a tenancy by entirety rests and to be contrary to the decisions of this court which have construed the statutes designed to remove the common-law disabilities of married women. A tenancy by entirety exists by virtue of the common-law principle of the unity of husband and wife. In so far as that principle imposed disabilities upon married women the legislature, in its effort to remove such disabilities, has by express enactment modified it. It is clear, however, as said by Judge Earl, " that whenever it intended an invasion of that rule, it made it by express enactment. " (Bertles v. Nunan, supra, p. 160.) If the legislature should wholly abrogate that principle it would remove the basis upon which alone a tenancy by entirety rests. Nor does the decision in Hiles v. Fisher (144 N. Y. 306, 312) support the conclusion reached below. That case held that the statute taking away the husband's right to the rents and profits of his wife's lands during their joint lives was applicable to a tenancy by entirety, but that the common-law doctrine of tenancy by the entirety was not abrogated. In that case it was pointed out with great particularity that the common-law right of the husband " to the usufruct was not an incident of the tenancy, but .of the marital right operating upon property so held, as upon all other real property of the wife." The respondents contend that if the estate granted did not create a tenancy by the entirety, it created a joint tenancy. It is urged that because survivorship is a common attribute of joint tenancy and tenancy by entirety, that, therefore, the estate created by the deed of the deceased to himself and wife should be regarded as a joint tenancy.
The conclusion suggested does not follow from the reason assigned. While a tenancy by entirety resembles a joint tenancy in that survivorship attaches to both, it is not a joint tenancy in substance or form. (Stelz v. Shreck, 128 N. Y. 263, 266; Barber v. Harris, 15 Wend. 615.) It involves a more intimate union of ownership than joint tenancy or any other estate. Joint tenants are seized per my et per tout, whereas tenants by entirety are seized per tout et non per my. (History of Eng. Law, Pollock & Maitland, vol. 2, p. 434.) In a tenancy by entirety the survivor takes the estate " not by right of survivorship simply, but by virtue of the grant which vested the entire estate in such grantee." (Bertles v. Nunan, supra, 156.) As Judge Oowen, in Jackson v. McConnell (19 Wend. 175, 178) said: "The survivorship presents the greatest formal resemblance; and yet, instead of putting that on the notion of a joint tenancy, the- authorities all refer it to the established effect of a conveyance to husband and wife, pretty much independent of any principles which govern other cases. " At common law a conveyance made to two persons who are not husband and wife would create a joint tenancy. (Stelz v. Shreck, supra.) Under our statute if we regard the conveyance as made to two persons, unless expressly declared to be a joint tenancy, it creates a tenancy in common. (3 R. S. [7th ed.] p. 2179, section 44.) A conveyance by a husband to himself and wife in the absence of any statement that a joint tenancy is designed to be created, operates to make the husband and wife tenants in common. In Saxon v. Saxon (46 Misc. Rep. 202) the estate granted was expressly declared to be a joint tenancy and the grant was, therefore, given that effect. In the case under consideration such a purpose is not expressed and as has already been shown the mere fact that survivorship is an attribute which attaches to both joint tenancies and tenancies by entirety does not of itself justify the conclusion that the estate intended to be conveyed was a joint tenancy. We conclude, therefore, that the surrogate was in error in holding that the deed of the husband to himself and his wife created a tenancy by the entirety. Under that deed the husband and wife became tenants in common of the property in question. As tenant in common the wife was seized of an undivided one-half interest in the property. The husband was seized of the remaining one-half undivided interest in the property and that interest passed to the respondents under his will subject to the transfer tax.
The orders of the Appellate Division and of the Surrogate's Court should be reversed, with costs, and the pro ceeding remitted to the surrogate to assess the transfer tax upon one-half the value of the property.