
    Matter of the Estate of S. Nelson Jones, Deceased.
    (Surrogate’s Court, Yates County,
    November, 1909.)
    Taxes — Inheritance and transfer taxes — Property and interest subject to tax — Transfer before death.
    Where the owner of several large farms executed deeds of them to his son, but the' deeds remained unrecorded and in the possession of the grantor until his death, the insurance on the buildings continued to be payable to the grantor who made contracts in his own name with tenants to work the farms, except the home farm on which his son lived; all the farms continued to be assessed to the grantor who paid the taxes, the crops were principally marketed at the grantor’s warehouse and the accounts thereof were kept in his books as though he owned them, and all transactions with tenants, including settlements with them, were had by the grantor, it will be inferred that it was the intention of the grantor that the deeds should not become effective until his death, and the transfer is, therefore, taxable.
    Appeal from an order assessing a transfer tax.
    Charles W. Kimball and Calvin J. Huson, for Herbert Jones, administrator and individually, appellant.
    John T. Knox and Henry J. Sadler, for Comptroller, respondent.
   Baker, S.

The grounds of this appeal are:

First. That the value of the estate as fixed by the order assessing the transfer tax is excessive and not warranted by the proof taken by the appraiser.

Second. That several large farms, upon the transfer of which a tax was assessed in said order, were, in fact, conveyed by the decedent to his son and members of his son’s family some five years previous to his death by deeds which transferred an absolute title, and that such transfer was not made in contemplation of the death of the grantor, nor intended to take effect in possession or enjoyment at or after such death, and is not taxable.

Herbert A. Jones, the son and administrator, is the only heir of the decedent, he and his father living in the same township, hut on separate farms.

There is no evidence which would justify a conclusion that a transfer was made in contemplation of death.

The undisputed evidence produced before the appraiser is that, after these deeds were executed, they remained unrecorded and in the possession of the grantor until his death; that the insurance carried on the buildings continued to he payable to the grantor; that he made contracts with the tenants to work the farms, excepting the home farm, on shares, describing himself in such contracts as “ the party of the first part” and signing “S. ¡Nelson Jones;” that the son continued to reside on the home farm and worked it,” the grantor continuing to live on the farm known as the Seamans farm; that all the farms continued to he assessed to the grantor, who paid the taxes; that the crops were mostly marketed at grantor’s warehouse at Him-rod, and the accounts thereof kept in grantor’s hooks, practically as though he owned them; that the transactions with the tenants were had by the grantor and all settlements made with him.

The son testified that he superintended the whole thing for Ms father practically the same as though he had taken full possession;” that he had all the avails of the farms since the date of the deeds, and that he had access to the desk in which the deeds were kept and, some of the time, had the keys to the desk.

The testimony of Herbert A. Jones is mostly incompetent evidence and would not have been received upon a hearing where some attention was given to the rules of evidence, and it should be carefully scrutinized. It is not supported by the acts of his father, nor the history of the farms subsequent to the date of the deeds, nor by the circumstances of the case.

The home farm of 280 acres, on which the son resided and worked and which he testified he leased to a tenant one year, making the lease in his own name, was not conveyed to him; but the deed names his wife, children and heirs as the grantees of this farm.

The fair inference to be taken from the testimony is that the grantees were not in possession or enjoyment of the farms described in the deeds, nor was it intended by the grantor that they should be until his death.

The deeds are absolute upon their face as to the title and immediate right of possession and enjoyment, and it is contended by the appellant that the intent as to the possession and beneficial enjoyment must be ascertained solely from the language of the deeds, and that the surrounding circumstances and extrinsic facts are immaterial.

I do not believe that the courts of our State have adopted such a rule for cases like this. That rule would be a tempting instrument in the hands of persons disposed to avoid the burden imposed by the Transfer Tax Law. It is unfortunately true that many of our citizens are disposed to look on a breach of our tax laws as a matter of thrift and to believe that they may violate such laws without being conscious of moral turpitude. The application of such a rule would permit persons so disposed to execute conveyances of their property, retain possession of the property and conveyances after a technical delivery of the deeds; and, at the death of the grantor, the grantee could maintain that, because the deeds so recited, the transfer was intended to take effect in possession and enjoyment at the date of the deeds, and was not taxable.

I find no authority for such a rule.

The courts in determining the intention look not only to the language of the deed, but to the relations existing between the parties and the fact of the beneficial enjoyment. Matter of Masury, 28 App. Div. 580.

The evidence produced before the appraiser is of sufficient force to bring the transfer within the statute and proves a transfer, either by deeds or intestate laws, which is taxable.

Having concluded that the transfer of the farms is taxable, even though they may have been transferred by the deeds in question, it is not necessary to consider whether the transaction with his father, as testified to by Herbert A. Jones, constituted a delivery of the deeds, or of any of them, except for the purpose of determining who shall pay the tax.

Counsel for the appellant, however, in his argument, stated that no question would be raised as to whom the tax should be assessed. The question of title should not be unnecessarily determined on this appeal, for all the parties do not appear to be represented.

The value placed by the appraiser upon the farms transferred is challenged by the appellant as being excessive and not warranted by the proof.

While the appraiser determined the value of the several farms to be the maximum value testified to, the finding is supported by some evidence and will not be disturbed on this appeal.

The order appealed from should be affirmed.

Order affirmed.  