
    In the Matter of the Appraisal under the Transfer Tax Acts of the Property of George Backhouse, Deceased. The Nassau Trust Company of the City of Brooklyn and Others, Appellants; Otto Kelsey, as Comptroller of the State of New York, Respondent.
    Second Department,
    January 12, 1906.
    Transfer tax—when remainder vestéd before passage of statute not subject to taxation—life estate with power of appointment—power of surrogate to cancel erroneous assessment.
    When a will makes a gift in trust for the life of the beneficiary, remainder to the beneficiary’s heirs “ or to such person or persons”" as such beneficiary “may appoint in his * * * last will and testament,” and such beneficiary dies leaving a will which appoints his children,.said children take under the original will and not under the will appointing them.
    
      Hence, such-remainder, being the creation of the original will, is not subject to a . transfer tax when the statute was not in force when the remainder vested.
    Although such'transfer tax-has-been levied, the surrogate has power to modify his decree, when the remaindermen, who failed to a-ppear, were only .notified that their father’s estate would be appraised,, and when the surrogate had no jurisdiction to impose the tax as aforesaid owing to lack of statutory authority.
    Such remaindermen cannot be said to have elected to take finder their father’s . will when there is no evidence of such election.
    Appeal by The Nassau Trust Company of the City of Brooklyn- and others from an order of the Surrogate’s Court of the county of Kings, entered in said Surrogate’s Court on the 17th day of November, 1905, denying the appellants’ motion to modify a decree theretofore entered in the proceeding fixing the transfer tax on the estate of George Backhouse,. deceased. , .
    The 'petition for modification was by the trustee under the will of . the father of, the said deceased, and the four children of the said deceased, who comprised all of his heirs at law, also joined.
    The will of Edward T. Backhouse left one-fifth of his property in trust for his son George Backhouse, the deceased to receive the income for life; remainder to the said son’s heirs', “ or to such person or.persons as such child pray appoint in his * * * last will and testament.” '
    The will of the said son did not appoint any other persons-,, but appointed his said children.
    After the death of the said son and the probate- of his will in September,. 1901, proceedings under the Transfer Tax Law were begun and the appraiser gave notice, to the said children of-appraisal of the property of the decedent.' They did not appear in filié proceeding, and.not only was the property left by the decedent appraised^, but also the said property left by his father, and the transfer tax imposed in-respect of both, and the said trustee under the-father’s will-paid it, the property being still in its. possession under the said trust.
    The motion was to modify the decree by striking out the part imposing the tax in respect of the latter property, and for its refund-
    
      Edward T. Horwill, for the appellants.
    
      Leonard B. Smith [Frank Julian Price with him on the brief]', for the respondent.
   Gaynor, J.:

The children of George Backhouse get the one-fifth of the estate of their grandfather by his will and not by the will of their father. It vested in them when the grandfather’s will took effect (Matter of Lansing, 182 N. Y. 238). It follows that it was not subject to a transfer tax, for the Transfer Tax Law had not yet been passed when it vested in them.

The surrogate had power to modify his decree, and should have done so, first, because ,the said children were not bound by it in so far as it imposed the tax in respect of the property they took under their grandfather’s will, for they were only notified of an appraisal of their father’s estate,' and that was therefore the limit of the jurisdiction of the appraiser and surrogate on their default; second, because the surrogate’s jurisdiction being limited to transfer's covered by the statute, he had no jurisdiction to impose the tax; and, third, because at most it was a mistake all round (Matter of Scrimgeour, 175 N. Y. 507). That in this Scrimgeour case the tax was imposed under an unconstitutional provision of the statute (a fact which the blind! report of the case conceals) does not distinguish it from the present case. In each case there was no statute for what was done.

There is no evidence that the said heirs ever elected to take under the appointment, if it can be called such,- of their father’s will, or if such election could be made.

The order should be reversed and the motion granted.

Hirsohberg, P. J., Woodward, Jerks and Hooker, JJ., concurred. •

Order of the Surrogate’s Court of Kings county denying motion to modify the decree assessing transfer tax reversed, with ten dollars costs and disbursements, and motion granted, with costs.  