Court Opinion

ID: 5190530
Source: CourtListenerOpinion
Date Created: 2022-01-06 15:35:17.249106+00
Date Added: 2024-06-11T08:26:54.054145
License: Public Domain

Jenks, J. (dissenting):
I dissent. When Mr. Mahlstedt made the assignment he lay upon his sick bed, so ill that his physician was calling upon him eight times a day, was attending throughout the nights and had called in Dr. Janeway for consultation. After the physician had advised the patient “ to put his worldly affairs in shape ” the patient sent for his attorney, who was permitted by the physician to see the client. Thereafter and upon the same day Mr. Mahlstedt executed his will, making his wife the solé beneficiary, and made the assignment to her of 559 shares of stock out of his holdings of 560 shares. At this time Mr. Mahlstedt was so weak that, though he subscribed his will, it was suggested that he could make his mark to the assign*181ment, and he did so. Three weeks thereafter the illness ended in death. After execution both will and assignment were given to a brother of Mr. Mahlstedt, who, under instructions, placed them in Mr. Mahlstedt’s safe in the house, where they remained until after Mr. Mahlstedt’s death. There is testimony that they were “ delivered ” to the wife.
It is hardly to be expected- that in transactions of this character positive proof can be given that the transaction was within the purview of the statute. The taxing power is not party to the transaction, and it is almost necessarily compelled to rely upon the attendant facts and circumstances which it may subsequently elicit, and the conclusions that may fairly be drawn therefrom. I think that the considerations discussed in the prevailing opinion are not sufficient to shake the conclusion that the act was within the purview of the statute, and that the decree should be affirmed. It is entirely true that but for the execution of the assignment the stock would have passed to Mrs. Mahlstedt (the assignee) as sole legatee under the will. But in that event the stock, being worth by the inventory $56,000,, would have been subject to a tax. (Laws of 1896, chap. 908, § 221, as amd. by Laws of 1901, chap. 458.) On the other hand, if it could be made to appear that the assignment was not made in contemplation of death, or was not intended to take effect after death, then the stock escaped the tax. May not this consideration have suggested the policy of an assignment? If the assignor intended to avoid a tax, was it not natural that he should seek to color the transaction with the appearance of an act neither done in contemplation of death nor intended to take effect after death ? If this were the purpose might not the retention of a single share afford, as it has afforded, an argument that the assignor in retaining an interest, infinitesimal though it might be, did not contemplate death ? So far as Mr. Mahlstedt’s statements are concerned, though his clerk testifies that Mr. Mahlstedt said to him that his physician had advised that he should go on a vacation, I cannot find that the physician confirmed this statement or that he testified that he gave other advice than that the patient should “ put his worldly affairs in shape.” As to the acceptance of the assignment by Mrs. Mahlstedt and her domination over the property of the corporation, it appears that her brother-in-law, an officer of the corporation, testified that the trans*182fer of the stock was made upon the corporate books prior to the death of her assignor. He produced the only stock book kept by the company, and testified that the certificates an,d stubs were the only different records of the company of the issuing and transfer of stock. How the indorsements on the stubs showed that the stock was tránsfered by assignment dated March 29,1899, dated this Mth day of May, 1899, and the witness testified that the indorsements represented the time of the transfer on the books of the company, that he was advised to pin the assignment and a request for transfer on the books, but that no demand for transfer on the books was made until after Mr. Mahlstédt’s death. It does appear that there was a meeting of the corporation on April fifth, when it was recited in the minutes a “ majority of stock being represented,” whereat Mrs. Mahlstedt nominated her brother-in-law for president, who thereupon nominated her for treasurer in his place. The addenda to the minutes read that Mrs. Mahlstedt was. elected by the vote of Mr. Geo. Mahlstedt at the above special meeting, “ he acting alone owing to the absence of A. Mahlstedt, who was confined to his home through illness,” and that the meeting could not be delayed owing to the fact that President Mahlstedt was too ill to sign checks and the interests of the company were jeopardized thereby. It is clear that the business was a close family corporation and that there was none to challenge' or question any act of Mrs. Mahlstedt in the premises. But her assertion of a right to act or her action in the routine business of this family concern, acquiesced in by her family, when there was none other to question it, does not go far, in my opinion, to establish a title to the stock in Mrs. Mahlsted so as to shut out the application of the statuté. I do., not give any weight to the testimony of Mr. George W,Mahlstedt that his brother “ transferred no personal property to any one in contemplation of death.” He cannot speak as to his'' brother’s intent. His opinion upon' the subject is not competent and his thoughts upon the matter are hot evidence.
Decree of the Surrogate’s Court of Westchester county reversed, with costs, and proceedings remitted to the surrogate for disposition in accordance with the prevailing opinion.