Court Opinion

ID: 3607297
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:52:26.321668+00
Date Added: 2024-06-11T09:40:52.639315
License: Public Domain

We are inclined to concur with the opinion, entertained by the learned justices of the Appellate Division, that Bostwick did not, in fact, during his lifetime, dispose of the property affected by these trust deeds; inasmuch as, after their delivery to the trustee, he not only was entitled at any time to revest himself with the ownership of the property, but he continued to be able, in some cases, to enjoy it and, in all cases, practically, to manage and to dispose of it, as effectually as he might previously have done.
The only difficulty, which arises, is with respect to the two trust transfers in favor of Bostwick's daughters. As to the other transfers, there can be no reasonable doubt that the properties affected thereby were subject to the operation of the Transfer Act. It is quite clear, from the terms of the trust instruments, that the donor retained such a control over the trusts and such a right to dispose of the income, as to make evident an intention on his part that the beneficial enjoyment of the property, by its remaining dependent upon his direction, was not to take effect until after his death. The usual absoluteness of right and enjoyment, which a completed gift carries, was wanting. But, as to the transfers for the daughters, it is argued that the MasuryCase (28 Appellate Division, 580; affirmed in this court, without opinion, 159 N.Y. 532) controls. In the Masury case, the deeds of trust, which were made in favor of the donor's adopted sons, and as to which it was held that the Transfer Tax Act did not apply, provided, each, for the payment of the income of the trust to the beneficiary during his minority and for the delivery to him of the securities, when he should attain his majority. The powers reserved in those deeds to revoke, or to annul, the trust during the donor's lifetime were considered, of themselves, not to affect the present vesting of the property, or to make its beneficial enjoyment contingent upon the death of the donor. There appeared to be nothing in the transaction, which pointed to the existence of an intention on the part of the donor that his transfer should not be absolute, or that the beneficial enjoyment of his gift should be postponed until his death. *Page 493 
The reserved power to revoke would enable him, of course, to put an end to the trust; but that was not enough to affect the possession of the trustee, or the beneficial enjoyment of the object of the donor's bounty, while the trust was in force, and such a power carried with it no control over the property or its management.
In the present case, however, the donor has reserved, during his life, such numerous and extensive powers over the properties transferred by his deeds, as to preclude the legitimate inference of an intention on his part that they were to take effect in absolute possession or enjoyment before his death.
The act of 1892, (Chap. 399, sec. 1, subd. 3), whose provisions must control, provided for the imposition of the tax upon the transfer of property, when it was made in contemplation of death, "or intended to take effect in possession or enjoyment at or after such death." We must discover the intention of Mr. Bostwick by considering the language of the instruments, through which he transferred his properties to the trustee. Instead of an out and out gift, which would provide for the enjoyment by the beneficiary of the income of the property during her life and for the disposition of the trust fund thereafter, we find powers reserved to alter, or amend, the trust by notice to the trustee; to withdraw, or to exchange, any securities, and to control the acts of the trustee in selling, or disposing of, the securities, or with respect to investments. All these are indicia, rather, of an intention on the donor's part to retain a dominion over the properties transferred, and do not consist with an existing purpose to vest the absolute right to present and future enjoyment in the beneficiaries. He retained practical control of the trust property and left the question of its beneficial enjoyment and eventual possession open until his death.
The affirmance of the decision in the Masury case may seem to have committed this court to views which support the contention now made in behalf of these appellants; but, if that be so, it is an erroneous inference from that decision.
I think that we may have gone too far in generally affirming *Page 494 
the Masury decision; certainly the limit was then reached, beyond which the courts could not go without emasculating the provisions of the statute. We thought there was some reason in the facts of the Masury case for finding an intention in the donor to make an absolute transfer of property during his life, which the mere reservation of a power to revoke was, of itself, insufficient to negative. But, if the trust transfers now in question were held to be without the operation of the act, too dangerous a latitude of action would be permitted to persons who desired to evade its provisions by some technical transfer, which would still leave the substantial rights of ownership in the donor. If a person intends, in good faith, to make an absolute gift of his property during his life to others and thereby to make a provision for them, which shall not be contingent as to its possession or enjoyment upon the event of his death, there is no inhibition in the act in that respect. The intent of the law is plain and it is the duty of the courts to give that construction to its provisions, which will effectuate the legislative purpose; while preserving, in all its integrity, the absolute right of every person to transfer his property during his lifetime, with such rights of enjoyment in the transferee, as the donor can give.
The order should be affirmed, with costs.
All concur.
Order affirmed.