against the daughter, Clara Myers. Upon appeal to the surrogate by the daughter, the surrogate of Monroe county affirmed his former taxing order, stating in his written opinion in reference thereto:

"While the court holds that said property was not transferred at the time of the death of decedent, and that the title of said property was not vested in the decedent at the time of his death, and that the title of said property was vested in the said Clara Myers about five years prior to the death of decedent, and that the beneficial ownership and enjoyment of said property was vested in said Clara Myers about five years prior to the death of the decedent, it is subject, however, to her agreement with the testator at the time of the transfer of said property to her that he should have the beneficial use of the income arising from the dividends on said stock during the life of the said decedent, I think that that reservation, which is clearly shown in writing, brings this case under the Matter of Brandreth, 169 N. Y. 437, and the Matter of Cornell, 170 N. Y. 423, and that the verbal agreement shown here to have been made, and claimed to be supplemental to the written agreement, made at the time of the sale, is not broad enough (even if the supplemental agreement were sufficient if broad enough) to bring this case under the Matter of Hess, 110 App. Div. 476."

173. Gifts Not Made to Take Effect at or after Donor's Death.

In the Matter of Craig, 97 App. Div. 289, 89 N. Y. S. 971; affd., 181 N. Y. Mem., it appears that on November 20, 1875, Hector Craig executed a deed of all his property, real and personal, to Havemeyer and Lane, trustees, providing for the payment to himself of all the income during his life. The deed was made in anticipation of the marriage of Craig with Mary W. Darrach, the deed reciting that the said Craig" is desirous of making provision out of his estate for the said Mary W. Darrach in case said marriage takes place, and the

said party of the first part (Craig) thereafter departs this life leaving her his widow him surviving," and making other provisions as to his estate.

Conditions: (1) If widow survives him and be at the time of his death his lawful wife, and not separated from him by mutual agreement or judicial decree, and no issue of such marriage in being at the time of his death, then the widow to have one-half of his property and remainder to certain sisters and collateral relatives.

(2) If wife dies before Craig, or is separated or divorced from him and no children living, then property is to go to certain charitable institutions.

(3) If Craig dies leaving lawful issue of such marriage, or of any subsequent marriage, living at his decease, then one-third to children, one-third to widow him surviving, and one-third to certain legatees and societies.

Appended to this deed is a statement that she (Darrach) accepts the provisions "in lieu of her dower and distributive share to which she might otherwise be entitled by reason of her marriage to Craig."

All the beneficiaries under this deed, excepting the Craig family, released to Craig prior to May 9, 1885, all their interest under said trust deed, and on May 9, 1885, a decree was entered in Supreme Court permitting the said Havemeyer, the surviving trustee, to resign his trust, and the New York Life Insurance & Trust Company was appointed trustee and charged in the decree with carrying out the provisions of the trust deed, except that Craig was to dispose by will of the interests released to him by the beneficiaries above referred to. This trust continued until the death of Craig, March 27, 1901, leaving his wife and two chil

dren surviving. Craig left a will giving his wife all that part of his estate which he had the right to dispose of, in addition to what she would receive under the trust deed.

November 26, 1901, the surrogate of Orange county made an order fixing tax, holding that the gift under the trust deed was intended to take effect in possession and enjoyment at or after death (subd. 4, § 220, Tax Law), and taxable. The widow and children appeal to surrogate on the ground that they took a vested interest under the trust deed at the time the deed was executed, in 1875, and therefore the transfer in possession and enjoyment upon the death of Craig is not taxable. The surrogate affirms his order of November 26, 1901, and appeal is taken to the Appellate Division.

The Appellate Division reverses the order of the surrogate and dismisses the proceedings, holding that the interests of the appellants are to be regarded as accruing under the trust deed, - that it is immaterial whether they are vested or contingent, or whether the trust deed is a gift inter vivos or causa mortis, — that the right as a property right to take the gifts when the time for possession and beneficial enjoyment should ultimately arrive, fully accrued at the date of the marriage and birth of the children, free from any existing tax upon the transfer either made or contemplated, and that subsequent legislation imposing a tax is unconstitutional (In re Pell, 171 N. Y. 48); that the word "vested," as used in many of the opinions of this court, is really to be construed as equivalent to the word "accrued," and not as distinguished from merely contingent interests. In that sense a property right which has been fully acquired is protected by the

contract and becomes in law a vested right. Matter of Vanderbilt, 172 N. Y. 69, 73.

Matter of Green, 153 N. Y. 223; Matter of Brandreth, 169 N. Y. 437; Matter of Cornell, 170 N. Y. 423, are all cases where the will or deed was either executed or took effect after the laws imposing a tax on inheritances or transfers. Matter of Seaman, 147 N. Y. 69, distinguished.

A grantor made certain deeds of trust in favor of his son, providing in each for the payment of the income of the trust to the beneficiary's guardian during such beneficiary's minority, and upon the beneficiary becoming of age the trustee was to pay over the securities constituting the fund and any unexpended income to said beneficiary; the deeds contained, however, a clause reserving the right of the grantor "to revoke and annul the same during my lifetime," — held not taxable as a gift intended to take effect after the donor's death, as such deeds divested the grantor of all title and become operative immediately upon their execution, in so far as the beneficial use of the same was involved, and vesting the fund upon given dates, in no wise contingent upon the death of the grantor, in the beneficiaries. Matter of Masury, 28 App. Div. 580-588, 51 N. Y. S. 331; affd., 159 N. Y. 532.*

Stocks transferred under an agreement, evidenced by bonds executed by the transferees, conditioned for the payment of an annuity to the party making the transfer and to other designated persons, and for the deposit of the securities as collateral security for the

In the Matter of Bostwick, 160 N. Y. 489, the court says: "I think we may have gone too far in generally affirming the Masury decision; certainly the limit was then reached beyond which the courts could not go without emasculating the provisions of the statute."

Gifts-Vested Interests.

§ 220

performance thereof, with a provision that in default of the payment of the annuities the depository might collect sufficient dividends on the securities to pay the amount due, or sell them to the extent necessary to raise such amount; held, a gift inter vivos and not taxable. Matter of Edgerton, 35 App. Div. 125, 54 N. Y. S. 700; affd., 158 N. Y. 671.

174. Vested Interests Although Will Contains No Words of Present Gift.

A testator in 1884, died leaving a will, wherein he devised and bequeathed his entire estate to his executrix in trust for the support of his widow until her death or remarriage. After the death or remarriage of the widow, certain legacies should be paid, and in the event of the death of any of the legatees the legacies" to go to the heirs of the person so dying," or "to go to his heirs and assigns." That after the death or remarriage of his wife, and the payment of the legacies, one-third of the estate "shall go to and belong to" his niece, "her heirs and assigns forever; " another one-third should go to his wife's nephew, heirs and assigns forever," and the remaining third should be divided into five parts and given to or held in trust for certain persons. In disposing of said five parts of the remaining third, the decedent used the expressions "shall belong to " and " shall go and belong to." The widow died in 1902, without having remarried, and the Comptroller contended that the legacies did not vest at the death of the testator, but the will created future gifts, which were not transferred until the death of the widow.

"his

The court held that the words "go to and belong to," as used in the will, should not be construed to