
    In the Matter of the Transfer Tax upon the Estate of Maurice Seligmann, Deceased. Eugene M. Travis, as Comptroller of the State of New York, Appellant; Elias Asiel and Albert Blum, as Trustees under the Will of Maurice Seligmann, Deceased, Respondents.
    First Department,
    December 30, 1915.
    Tax — transfer tax — testamentary provision that corpus of trust estate shall be paid to beneficiary if he attains certain age — assessment of contingent estate in expectancy — Tax Law, section 230, construed.
    Where a testamentary trust provides that the trustee shall pay over to the beneficiaries one-third of the corpus as they respectively attain the ages of twenty-one, twenty-five and thirty years, the net income in the meantime to be paid to the beneficiaries, with contingent remainders to the issue of such beneficiaries as may die, or to the survivors if a beneficiary die without issue, and at the original appraisal of the transfer tax the value of the temporary life estate was fixed at a certain sum and the value of the remainder was fixed at another stated sum, but the actual taxation of the remainders was suspended on account of the contingencies mentioned in the will, the remainders, when they become payable upon the beneficiaries arriving at the ages aforesaid, should be assessed at their full undiminished value.
    Such appraisal of the remainder is authorized by section 230 of the Tax Law relating to the appraisal of estates in expectancy which are contingent or defeasible and providing that they shall be appraised at their full, undiminished value when the person entitled thereto shall come into the beneficial possession thereof. The fixing of the value of the remainders in the original appraisal was not a determination and may be disregarded.
    Said section 280 of the Tax Law relates to cases where a life tenant is also the remainderman as well as to cases where they are different persons.
    Ingraham, P. J., and McLaughlin, J., dissented.
    Appeal by Eugene M. Travis, as Comptroller, from an order of the Surrogate’s Court of the county of New York, entered in the office of said Surrogate’s Court on the 29th day of April, 1915, fixing and assessing a transfer tax upon this estate.
    
      Schuyler C. Carlton, for the appellant.
    
      Abraham L. Gutman, for the respondents.
   Scott, J.:

The will of Maurice Seligmann, deceased, was admitted to probate on April 24, 1908. By the 2d clause of his will he gave all of his residuary estate to his executors in trust to convert the same into money, and to divide it into two equal portions. As to one of said portions he directed his executors to dispose thereof as-follows: (2) And as to the other equal portion of my residuary estate, to allot the same in equal shares to my children me surviving and to the then surviving issue of any deceased child of mine, such issue taking the share their parent would, if then living, have been entitled to; and as to the share allotted to such issue, to pay over such share to such issue; and as to the share allotted to each child of mine, to invest the same as provided in paragraph Fourth of my will, and to pay such share to such child as follows: One-third of such share upon such child’s attaining the age of twenty-one years; one-third thereof upon its attaining the age of twenty-five years, and the remaining one-third thereof upon its attaining the age of thirty years, and until the whole of such share shall have been paid to such child as aforesaid, the net income of such share, or so much thereof as shall remain unpaid, shall be paid to such child; and in case of such child dying before the whole of such share shall have been paid to it, then such share or so much thereof as shall remain unpaid; shall be disposed of as such child shall by its last will direct, and in default of any such testamentary disposition, then the same shall be paid to the then surviving issue of such child and in default of any such issue then surviving, then the same shall be paid to the then surviving brothers and sisters of such child and the then surviving, issue of any deceased brother or sister, such issue taking by representation the share their parent would, if. then living, have been entitled to; and in default of any brother or sister or issue of any deceased brother or sister of such child then surviving, then such share or the residue thereof shall be paid to my then surviving heirs under the present New York Statute of Descent.”

Transfer tax proceedings were had upon the estate of the deceased, and the appraiser’s report was filed December 22, 1909, the original taxing order being entered December 27, 1909.

The surviving children of Maurice Seligmann were two sons, George A. Seligmann and Arthur R. Seligmann. At the date of death George A. was over twenty-one years, but under twenty-five years, and Arthur R. was a minor, under twenty-one years of age. George A. became twenty-five December 25, 1912, and Arthur R. became twenty-one November 19, 1914.

By the report of the appraiser it appears that each installment due each brother respectively, at the ages of twenty-one, twenty-five and thirty, was the sum of $70,573.43.

The second installment of George A.’s bequest amounting to $70,573.43, and an equal amount, being the first installment of Arthur R.’s bequest, have now fallen due, and this proceeding was brought to fix, and concerns only the tax on these installments.

At the time of the appraisal the value of George A.’s temporary life estate in the installment due when he should become twenty-five was fixed at $12,335 by the appraiser and the value of the remainder was fixed at $55,.805. The first installment of Arthur R.’s bequest was appraised as follows:

“Present value * * * $17,542” and “remainder * * * $50,846.”

Taxes were paid at the time on the original taxing order on the present values of the temporary estates in these two funds, but taxation on the remainder was suspended on account of the contingencies provided by the will, which defeated the shares of the two brothers in case of death, respectively, before arriving at the ages of twenty-one and twenty-five.

By the order appealed from the tax is imposed upon $55,805 in the case of George A., and $50,590 in the case of Arthur E. The Comptroller contends that the amount subject to taxation is the full undiminished value of the remainder, being $70,573.43 in each case.

The basis of the Comptroller’s contention is section 230 of the Tax Law (Consol. Laws, chap. 60; Laws of 1909, chap. 62), which provides: “Estates in expectancy which are contingent or defeasible and in which proceedings for the determination of the tax have not been taken or where the taxation thereof has been held in abeyance, shall be appraised at their full, undiminished value when the persons entitled thereto shall come into the beneficial enjoyment or possession thereof, without diminution for or on account of any valuation theretofore made of the particular estates for purposes of taxation, upon which said estates in expectancy may have been limited. ” (See, also, Laws of 1911, chap. 800, amdg. said § 230.)

The case at bar seems to fit the words of the statute. What each son received as to each installment of the amount “allotted” to him was what the appraiser and the appellant call a “temporary life estate ” to be followed by a gift of the whole share when and if he attains the specified age. If he dies earlier the share goes to others who would take not through him, but directly under the will of the testator. He, therefore, receives as to each share a present temporary life estate with a remainder contingent upon his living until the prescribed age. It is significant that the will contains no words of gift to either son, except in the direction to the trustees to pay over to him on his attainment of the prescribed ages. Until then the whole estate is in the trustees, the son having no right except to receive the income. What was valued by the appraiser in 1909 and was taxed by the court was not the son’s contingent or prospective inheritance of the corpus of the share allotted to him, but was the estimated value of his temporary life estate, an estate or interest quite apart from his expectant remainder. The report of the appraiser that $55,805 was the value of the remainder interest of George A. Seligmann, to take one instance, was not confirmed by the surrogate’s order fixing the tax on the temporary life estate; was not within the scope of the matters submitted to the appraiser for determination, and may be disregarded. (Matter of Mason, 120 App. Div. 738; affd., sub nom. Matter of Naylor, 189 N. Y. 556.)

If the remainderman were someone other than the temporary life tenant I assume that no question would be made as to the liability of the remainder for assessment at its full, undiminished value. I cannot see that any different rule is to be applied because the temporary life tenant and the remainderman happen to be the same person.

The only theory upon which a different appraisement can be made is that the share of each son was given to him outright at the testator’s death, payment merely being postponed. Not only is this theory contrary to the terms of the will, but it is inconsistent with the order of December 27, 1909, which proceeded upon the theory that the sons received at the death of the testator only temporary life estates.

In my opinion the State Comptroller’s contention is sound and the remainders should be assessed at their full, undiminished values. The order appealed from must, therefore, be modified in accordance with the views herein expressed, and as modified affirmed.

Laughlin and Dowling, JJ., concurred; Ingraham, P. J., and McLaughlin, J., dissented.

Order modified as stated in opinion, and as modified affirmed. Order to be settled on notice.  