
    Matter of the Estate of Jane H. Reed, Deceased.
    
      (Surrogate’s Court, Saratoga County,
    
    
      March, 1915.)
    Savings Banks—Where Deposit in Savings Bank Expressly Stated to be Joint Account—When Deposit Subject to Transfer Tax— Taxes.
    Where a savings bank deposit of $3,000, made in 1908 in the name of Mrs. Jane H. Reed, the decedent, and a niece, was- expressly stated to be a joint' account wi,th right of survivorship payable to either or to survivor, the full and complete ownership of the whole deposit was not intended to vest in the niece until she became the survivor at the death of decedent in 1914, and the deposit is subject to a transfer tax.
    Where decedent, shortly after making a deposit of $3,000i in a savings bank in 1910 “ In account with Mrs. J. H. Reed or Mrs. Sarah M. Olute, her sister,” informed said sister of the fact and showed her the pass-book, there was a gift' inter vivos of one-half of the deposit, thus creating a tenancy in common, and one-half is subject to a transfer tax.
    Where decedent, soon after making a deposit of $3,000 in a savings bank in 1911 in the name of “ Mary J. Reed in trust for Dow S. Olute,” showed the bank book to Dow who was an infant, and to his father, and told them that she intended it to be for the benefit of the infant and “ that it was and was to be his and to belong to him ” there was a present transfer by way of a gift inter vivos and the same was not subject to a transfer tax, it being conceded that Jane H. Reed and Mary J. Reed are the same person.
    A deposit made by decedent in 1910 “In trust for her nephew Fred S. Olute ” amounted to a gift inter vivos and the title to the deposit passed at that time and was not subject to a transfer tax.
    Proceeding to- determine transfer tax questions in relation to certain savings, bank deposits.
    Burton D. Esmond, for comptroller.
    George B. Lawrence, for executors and beneficiaries.
   Ostrander, S.

Thi-s is a proceeding to determine transfer tax questions in relation to certain savings bank deposits. Deceased' died at the town of Malta September 29, 1914.

On July 6, 1908, s|he deposited in the Albany Savings Bank $3,000, the deposit standing “ Albany Savings Bank in account with Mrs. Jane H. Reed and Jennie 0. Gray, her niece. Joint account with right of survivorship payable to either creditor or to survivor.”

January 10, 1910, she desposited $3,000 in the Rational Savings Bank of Albany, the account being entered in the name of said bank “ In account with Mrs. J. H. Reed or Mrs. Sarah M. Clute, her sister.”

On October 6, 1910, she deposited $3,000 in the Albany County Savings Bank “ In trust for her nephew Fred S. Clute.”

On July 8, 1911, she deposited $3,000 in the Albany County Saving Institution in the name of Mary J. Reed in trust for Dow S. Clute.”

Jane H. Reed and Mary J. Reed are conceded to be the same person.

Chapter 220 of the Tax Law, in relation to transfer tax, provides, that a tax be imposed upon the transfer of property “ by deed, grant, bargain, sale or gift, made in contemplation of the grantor, vendor or donor or intended to take effect in possession or enjoyment at or after such death.”

The last of these deposits was made over three years before Mrs. Reed’s death and no facts are shown warranting the inference that any of them were made in contemplation of her death within the meaning of those words as defined by the courts.

The next inquiry is whether the transfers to the various beneficiaries, under thé circumstances, were intended to take effect in possession or enjoyment at or after her death. The various deposits, will be considered separately.

It appears- from the affidavits filed that,, shortly after the deposit of July eighth, decedent informed Mrs. Gray that she had made the same, the amount of it and the manner in which she had deposited! the money and showed the passbook to Mrs. Gray. This deposit, it will be noted, was defined in the passbook as a joint account, with right of survivorship, payable to either creditor or survivor.”

This brings it within .the provisions of chapter 369, Laws of 1914, section 249, subdivision 3, which declares that such a deposit shall become the property of such, persons- as joint tenants.” The provision has been in force since 1907, prior to this deposit.

In Bonnette v. Molloy (153 App. Div. 73), it was said that if the moneys deposited in form similar to Mrs. Gray had been so deposited after this enactment, there could be no question but that the survivor would be entitled to the fund. Prior to this enactment there had been frequent difficulty in ascertaining the intentions of the parties in such, case in respect to joint tenancy and there had been great reluctance, to find that the depositor intended to create such joint tenancy of the fund with a, right of survivorship except upon very clear and cogent evidence. But the latter part of said section 249, ais amended in 1914, provides that the deposit in such form shall he conclusive evidence of the intention of both parties to vest the title to such deposit and all additions in the survivor.

In this case we have not only the statutory declaration but very clear expression of the intent of all the parties to the contract. In most of the recorded cases the controversy has been with reference to the ownership of the fund after- the death had occurred, while-adjudication as to when the complete ownership finally vested for purposes of the Transfer Tax Law has not been common.

It will he further noted that these joint- tenancies in personal property, which it is conceded may exist, are not of the same quality as estates by the entirety in lands which can exist only between husband and wife who are in such case considered in law a.s one and the same person.

In Matter of Pitou (79 Misc. Rep. 385), Surrogate Ketcham held that even in case of joint tenancy the survivor became the owner of his associate’s part because his associate died, and when he died, and that the transfer for such part was “ intended to take effect in possession or enjoyment ” upon the death of such tenant and was taxable.

Judge IIext, in his Commentaries (Yol. 4, p. 360) says, the whole estate or interest held in joint tenancy whether it was an estate in fee, or for life, or for years, or was a personal chattel, passed to the last survivor and1 vested in him absolutely. It passed to him free and exempt from all charges made by the deceased co-tenant.

The consequence of this doctrine is that a. joint tenant cannot devise his interest in the land; for the devise does not take effect until after the death of the devisor and the claim of the surviving tenant arises in the same instant as that of the devisee and is preferred.

It will be noted that the addition- to section 249 of the Banking Law above noted provides that in such case it is to be conclusively inferred that both parties intended to- vest the title in the survivor. Until the death of one there can be no survivor and consequently no- complete vesting of title or “ taking effect in possession or enjoyment.”

The moneys were -originally Mrs. Reed’s. Wh-at she gave to Mrs. Gray was not an immediate and absolute right to all the money but a right to the whole of it in case she became the survivor, and subject to a right in each to draw the whole deposit during their joint lives. The full and complete ownership of the whole was not intended to- vest in Mrs. Gray until she became the survivor -at the death of Mrs. Reed.

This deposit is therefore taxable.

As to the deposit for Mrs. Olute:

It appears that shortly after the deposit in January, 1910, the deceased informed Mrs. Clute that she had deposited said moneys in the form set forth and showed her sister, Mrs. Clute, the pass-book containing said account. This deposit made to Mrs. Reed or Mrs. Clute is- of the same effect as if made to Mrs. Reed and her sister. (Clary v. Fitzgerald, 155 App. Div. 659.)

In this case of Mrs. Clute, there is no word in relation to a trust or survivorship in the form of this, deposit, nor is- it in form to he deemed a joint tenancy under section 249 of the Banking Law above quoted, since it is not in terms to be paid to the survivor. The fact that Mrs. Reed showed, the book to- her sister in this form does not show any intention with regard to- it other than its form would indicate.

In Corcoran v. Hotaling (164 App. Div. 75), it was1 held that a deposit in this form was not inconsistent with an intention to create a joint tenancy in the fund where there was sufficient proof of such intention, but in this case at bar no such" intention appears outside of the words on the bank-book. These words import a gift inter vivos of one-half of the fund, thus creating a tenancy in common. This leads to the conclusion that- one-half of this fund is taxable.

The deposit made in trust for Fred S. Clute by the deceased seems to fall within the rule of Matter of Totten (179 N. Y. 112) ; Matter of Pierce (132 App. Div. 469) ; Stockert v. Dry Dock Savings Institution (155 id. 123) ; Hessen v. McKinley (Id. 496), where it was held that when notice of the trust form of the deposit wasi given to the beneficiary the trust became irrevocable. The transaction amounted to a gift inter vivps, the title passed at the time and the deposit was not taxable.

■Concerning the Dow S. Clute deposit:

Very soon after making the- deposit Mrs. Reed showed the book to Dow, who was- an infant, and to his father, and told them that she intended it to be for his benefit, and that it was and was to be his -and to- belong to him.” If, -as she expressed ■ her intentions, “ it was his ” when she showed him the passbook, his ownership- w-as not postponed, and there seems' to be every element required for a gift inter vivos. This- was then a present transfer, and was-not taxable.

The question of exemption from taxation of any of these matters by reason of relationship of the beneficiary to the deceased, or by reason of the amount passing to the beneficiary, is not considered in this opinion, but will be determined upon the adjustment of the tax.

Decreed1 accordingly.  