Different Rates of Taxation; Law Is Constitutional. § 220 tection of the impairment clause of the Federal Constitution; that the remaindermen had no contract with the donor of the power, or with the State, and no contract right of the parties was violated by the imposition of such tax. 8. Provisions Creating Different Rates of Taxation, and Taxing Transfers by Trust Deed Where Life Estate Therein Is Reserved to Grantor, Are Constitutional. In the Matter of Keeney, 194 N. Y. 281, it was urged by the appellant that the Transfer Tax Statute was unconstitutional as involving an "arbitrary, discriminating and unequal tax upon the transfers of property "in two respects. First, that the rate of tax varies according to the relation the grantee bears to the grantor; and second, that it singles out transfers where a life estate is reserved to the grantor for taxation, leaving all other transfers or conveyances exempt. The court says: "As to the first objection, the grantees in the deed, in this case being children of the grantor, are subjected to the lowest rate of taxation (with the exception of certain exemptions which would not invalidate the law (Beers v. Glynn, 211 U. S. 477), and we cannot see that they have any valid cause for complaint that other grantees are subjected to a higher rate. That objection, if tenable, could be taken only by grantees taxed at the higher rate, and, even if good, would not render the statute void in entirety. It may be also observed that if the statute is to be construed as applicable only to voluntary transfers or gifts, as to which we express no opinion, the discrimination between relatives and strangers would seem to meet the approval of even the dissenting justice in Magoun v. Illinois T. Co., 170 U. S. 283. "As to the second objection that the statute taxes transfers only of one character, exempting others, we do not think that the discrimination is so unreasonable that the statute can be pronounced invalid. The right and power of governments to single out certain classes of objects for taxation, leaving other classes exempt or taxed at a different rate or in a different manner, is unquestionable. Such power has been exercised by all governments from the earliest times. It is subject, however, to the qualification that the classification must not be, as said by Judge Vann in People ex rel. Farrington v. Mensching, 187 N. Y. 8, so purely arbitrary as to have no reason, not even an insufficient or merely plausible reason, to justify it.' We think that there are sufficient reasons to support the classification made by the statute, at least § 230 Unconstitutional Provision. that the classification cannot be said to be devoid of reasonable ground on which to rest. Inheritance tax laws have been very generally adopted throughout the States of the Union. A substantial part of the revenue necessary to support their governments is now derived from that source. A not wholly unnatural desire exists among owners of property to avoid the imposition of inheritance taxes upon the estates they may leave, so that such estates may pass to the objects of their bounty unimpaired. It is a matter of common knowledge that for this purpose trusts or other conveyances are made whereby the grantor reserves to himself the beneficial enjoyment of his estate during life. Were it not for the provision of the statute which is challenged, it is clear that in many cases the estate on the death of the grantor would pass free from tax to the same persons who would take it had the grantor made a will or died intestate. It is true that an ingenious mind may devise other means of avoiding an inheritance tax, but the one commonly used is the transfer with reservation of a life estate. We think this fact justified the Legislature in singling out this class of transfers as subject to a special tax." 9. Unconstitutional Provision; Chapter 76 of the Laws of 1899, Amending Section 230 of the Act of 1896. Section 230 of the Act of 1896 was amended by chapter 76 of the Laws of 1899 by providing that "All estates upon remainder or reversion which vested prior to June thirtieth, eighteen hundred and eighty-five, but which will not come into actual possession or enjoyment of the person or corporation beneficially interested therein until after the passage of this act shall be appraised and taxed as soon as the person or corporation beneficially interested therein shall be entitled to the actual possession or enjoyment thereof." This provision was declared unconstitutional by the Court of Appeals in the Matter of Pell, 171 N. Y. 48, the court holding that to attempt to impose a tax in such a case, based on the succession, would be to diminish the value of vested estates, to impair the obligation of a contract, and to take private property for public use without compensation. The question arose under a will which took effect in 1863, whereby the testator Pell had given his wife a life estate in his property with remainder over at her death to certain nephews and nieces or their issue, and Effect of the Repeal of the Act of 1885. § 220 to a sister. The widow died in 1899, and it was then sought to tax the remainder interests which then vested in possession. The Appellate Division (60 App. Div. 286, 70 N. Y. S. 196) held that if, under the Transfer Tax Law, nothing could be taxed but the right of succession, then, as that right passed in 1863, the property was not taxable, but they evidently viewed the provisions of the Transfer Tax Law taxing the property of a nonresident, and gifts causa mortis, as a tax upon property, and held that the tax in question could be sustained as a tax upon property, thus eliminating all constitutional objections in reference to impairing the vested rights of the remainder men. By chapter 173 of the Laws of 1901 this provision was amended by applying its provisions only to remainders and reversions vesting before May 1, 1892, but after the decision of the Court of Appeals, reversing the Appellate Division in the Pell case, was handed down May 6, 1902, and subsequent to this last amendment, no attempt has been made since to assess a tax upon such vested remainders, and the entire provision was omitted in the amendment to section 230 by chapter 368 of the Laws of 1905. 10. Effect of the Repeal of the Act of 1885. The estate of a testator who died in 1888 was not relieved from liability for taxation under Laws 1885, chapter 483, as amended by Laws 1887, chapter 713, by the express repeal of the Collateral Inheritance Tax Act, and all amendments thereto by chapter 399 of the Laws of 1892; and an order made in 1900 assessing the transfer tax upon property of such testator in proceedings instituted in 1898 under Laws 1896, chap § 220 Amendments Are Not Retroactive. ter 908, as amended by Laws 1897, chapter 284, which governed and prescribed the method of procedure only in ascertaining the amount of the transfer tax, was within the jurisdiction of the surrogate. While chapter 399, Laws of 1892, repealed the Collateral Inheritance Tax Act and all amendments thereto without any saving clause in the repealing act itself, it has, nevertheless been continuously in force by virtue of section 32 of the Statutory Construction Law (Laws 1892, chap. 677). Matter of Jones, 54 Misc. 202. 11. Amendments Are Not Retroactive unless Stated to Be. The various amendatory acts referred to in the footnotes to the different sections have not been construed to have any retroactive effect except such intention was clearly shown by the language used. In the Matter of Van Kleeck, 121 N. Y. 701, the Court of Appeals said: "But legislative acts are always construed as prospective in their operation, unless by their plain language it can be seen that it was the legislative intention that they should have retroactive effect." To the same effect, Matter of Seaman, 147 N. Y. 69. Subdivision 3 of section 1 of the Act of 1892 embraced substantially the provisions contained in subdivisions 3, 4, and 6 of section 220 of the Act of 1896, and is the same as the corresponding subdivision of section 220 of the Act of 1905, and, in referring to the portion thereof which is now contained alone in subdivision 3, the Court of Appeals, in the Matter of Seaman, 147 N. Y. 69, 76, 77, said that this provision was to be construed as affecting grants or gifts causa mortis, and does not include transfers by will or intes Corresponding Sections of Former Acts. § 220 tacy, so as to subject to taxation rights of succession which accrued before the statute came into existence, thus making the act retrospective in its operation. The exemption of bishops and religious corporations by chapter 169, Laws of 1892, and continued in the Acts of 1892 and 1896, was retroactive. Roman Catholic Church v. Niles, 86 Hun, 221. The words "heretofore or hereafter" were omitted from the provisions of section 221 exempting bequests to a bishop and to certain corporations, as amended and re-enacted by chapter 368, Laws of 1905. It seems that a repeal of a statute of limitations may lawfully be retroactive. Matter of Moenich, 39 Misc. Rep. 480, 80 N. Y. S. 222. See Matter of Hoople, 179 N. Y. 308, as to the effect of the two-year limitation relative to refunds under section 225. An amendatory statute has no retroactive effect unless such a legislative intent is discoverable in the act. Matter of Miller, 110 N. Y. 216. The provisions of section 230, "Whenever an estate for life or for years can be divested by the act of omission of the legatee or devisee, it shall be taxed as if there were no possibility of such limitation," has no retroactive effect, and applies only to the life estate, not to the reversion. Matter of Sloane, 154 N. Y. 109, affg. same case, 19 App. Div. 411, 46 N. Y. S. 264. 12. Corresponding Sections of Former Acts Relating to Taxable Transfers. Section 1, chapter 483, Laws of 1885 not only defined the taxable transfers, but also contained provisions relating to the exemptions and limitations, which were afterward placed in section 2 of the Act of 1892. The Act of 1885 became a law June 30th of that year and imposed a tax of five dollars upon |