Case Name: In the Matter of the Appraisal under the Transfer Tax Acts of the Property of Maria B. Chapman, Deceased. Charles H. Gaus, Comptroller of the State of New York, Appellant ; Edwin N. Chapman and John D. Chapman, as Executors, etc., of Maria B. Chapman, Deceased, Respondents
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1909-06-18
Citations: 133 A.D. 337
Docket Number: 
Parties: In the Matter of the Appraisal under the Transfer Tax Acts of the Property of Maria B. Chapman, Deceased. Charles H. Gaus, Comptroller of the State of New York, Appellant ; Edwin N. Chapman and John D. Chapman, as Executors, etc., of Maria B. Chapman, Deceased, Respondents.
Judges: 
Reporter: Appellate Division Reports
Volume: 133
Pages: 337–345

Head Matter:
In the Matter of the Appraisal under the Transfer Tax Acts of the Property of Maria B. Chapman, Deceased. Charles H. Gaus, Comptroller of the State of New York, Appellant ; Edwin N. Chapman and John D. Chapman, as Executors, etc., of Maria B. Chapman, Deceased, Respondents.
Second Department,
June 18, 1909.
Tax — decedent’s estate—transfer tax — vested remainder—power of disposition — election.
The Transfer Tax Law does not affect a transfer of property made before it went into effect.
Where a testator, who died before the enactment of any inheritance or transfer tax statute, gave an undivided share of his estate in trust for his daughter and directed that upon her death the corpus of such share he paid to such persons as she might by a last will direct or, in case of her failure to exercise such power of disposition, then to her lawful issue as if she had'died intestate, the children of the daughter living at the testator’s death had a vested remainder in the estate given in trust to their mother, subject to open and let in after-born children or to be defeated by the valid exercise of the power of disposition, and upon their mother’s death no transfer tax can he levied on the transfer of the fund to the children, although she executed a will devising her share in her father’s estate to her children, .share and share alike.
Although the mother in. form exercised her power of appointment it did -not effectively transfer the property, for it left the title where it was before, and the result was the same as though there had been no power to exercise.
It does not change the situation that she directed that each share should be held in trust until each child reached the age of twenty-five years, where all had reached that age before her death.
If any election by the children whether they would take under their grandfather’s or mother’s will were necessary, their refusal to pay any transfer tax was a sufficient one.
Woodward and Miller, JJ., dissented, with opinion.
Appeal by Charles H. Gaus, Comptroller'of the State of New-York, from an order of the Surrogate’s Court of the county of Kings, entered in said Surrogate’s Court on the. 23d- day. of February, 1909, reversing an order entered in said Surrogate’s Court on the 6th day of October, 1908, fixing a transfer tax herein.
William, W. Wingate, for the appellant.
Fritz W. Hoeninghaus [James Allison Felly with him on the brief], for the respondents.

Opinion:
Burr, J.:
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.) 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, restrictions and discretion as said daughter shall lawfully by her last will, and testament direct, create and appoint.' If such daughter shall fail to lawfully exercise said 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. Chapman and Harold-"Wl 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 iñ 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 id. 634; Stringer v. Young, 191 id. 157.) 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.) 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 4th 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 twenty-eight years (afterwards changed by her codicil so that the period of the termination of the trust was twenty-five years). ' Each of her sons was more than twenty-five 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 App. Div. 479.) 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 timé 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 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'tlie surrogate was right, and the order appealed from should be affirmed, with costs..
Jenks and Gaynor, JJ., concurred; Woodward, J.,, read for reversal, with whom Miller, J., concurred.