
    In the Matter of the Appraisal of the Estate of Elizabeth W. Wheeler, Deceased, under the Acts in Relation to Taxable Transfers of Property. William C. Wilson, Acting Comptroller of the State of New York, Appellant; Edgar F. Wheeler and Adaline D. Wheeler, as Executors, etc., of Elizabeth W. Wheeler, Deceased, Respondents.
    Second Department,
    November 16, 1906.
    Tax — when remainders not taxable under will of life beneficiary — unauthorized purchase of lands by beneficiary — resulting trust—' taxation of legacies to stepchildren.
    When a deceased executrix who had a life interest in personal property purchased lands therewith without the consent of the remaindermen, the property is impressed with a resulting trust and the remaindermen may claim undtír the original will". The property is not subject to a transfer tax as passing under the subsequent will of the executrix.
    By virtue of section 221 of the Tax Law, as amended by chapter 368 of the Law.s of 1905, legacies to stepchildren to whom the decedent stood in the mutually acknowledged relationship of parent for ten years, beginning before the child’s fifteenth birthday, are taxable unless the parents of the child were deceased when such relationship commenced.
    Appeal by William 0. Wilson, Acting Comptroller of the State of Mew York, from an order of the Surrogate’s Court of the county of Westchester, .entered in said Surrogate’s Court on the 7th day of July, 1906, reversing, in part, an order entered in said Surrogate’s Court on the'30th day of April, 1906.
    
      Frank M. Buck, for the appellant.
    
      Frank L. Young, for the respondents.
   Miller, J:

The State Comptroller appeals from a final order of the surrogate of Westchester county in a transfer tax proceeding. The deceased left a-will-in which she gave a specific legacy valued at sixty dollars to Lucretia W. Corey, certain specified articles of persoual property to Adaline D. Wheeler, and divided her residuary estate equally between said Adaline and Edgar F. Wheeler. The shares of Adaline and Edgar in the personal property are appraised at $638.81 and $310.32 respectively. The real property consisted of an equity, of redemption appraised at $1,500. The testatrix used in the purchase of this property $1,665.36 which she held as executrix of James L. Wheeler, deceased* by whose will she was given the life use of the property, with the remainder over to said Edgar and Adaline who now assert that they take this property under the will of the said James L. Wheeler and not under the will of the decedent whose estate is the subject of this proceeding..

We think the learned surrogate correctly held that this property was not subject to the transfer tax. The fact that the testatrix invested money belonging to the said Edgar and Adaline in real property and without their knowledge took title in her own name did not make the property hers. They are entitled to follow the money and to insist that she held the property with which it was purchased under a resulting trust (Ferris v. Van Vechten, 73 N. Y. 113), and they have a right now to insist, as they do, that they will claim under the will of their father and not under the will of the decedent.

The legatees named were stepchildren of the decedent to whom they stood in the mutually acknowledged relation of children. The right to tax their legacies depends upon the construction of section 221 of the Tax Law (Laws of 1896, chap. 908) as amended by chapter 368 of the Laws of 1905, which is as follows: “ When property real or personal or any beneficial interest therein of the value of less than ten thousand dollars passes by any such transfer to or for the use of any father, mother, husband, wife, child, brother, sister, wife or widow of a son or the husband of a daughter, or any child or children adopted as such in conformity with the law's of this State, of the decedent, grantor, donor or vendor, or to any child to whom any such decedent, grantor, donor or vendor for not less than ten years prior to such transfer stood in the mutally acknowledged relation of a parent, provided, however, such relationship began at or before the child’s fifteenth birthday and was continuous for said ten years thereafter, and provided also that the parents of such child shall he deceased when such relationship commenced, or to any lineal descendant of such decedent, grantor, donor or vendor horn in lawful wedlock, such transfer of property shall not be taxable under this act * * (The italics are mine.) No question is raised but that the share of Adaline in the personal property should be taxed, as it is conceded that she was'over fifteen when the relationship began. .The shares of Lucretia and Edgar were not taxed, although it is conceded- that their parents were not deceased when said relationship commenced, such relationship having begun upon the marriage of their father to the testatrix, and- in this respect we think the learned surrogate erred, because by the clause of the statute which I have italicised they are expressly excluded from the class whose shares are exempted. The right of the Legislature to impose a tax upon the transfer of decedents’ property, whomsoever the transferee may be, is undoubted, and a person claiming to he excepted ‘from the general provisions of - the statute must bring himself within the terms of the exception. The statute was amended in 1905 by the addition of the clause italicised, which is too plain to admit of construction. By it the Legislature has plainly limited the exempt class of persons to whom the decedent stood in the mutually acknowledged relation of parent not only to those whose relationship began at or before their fifteenth birthday and continued for ten years thereafter, but also to those whose parents were deceased at the time- the relationship commenced. .1 am unable to discover any satisfactory reason for such limitation. If it is desirable, as it plainly is, to treat as natural children those who stand in the mutually acknowledged relation of children to the deceased, it would seem that all whoi stand in such relation should be so treated, and the only conditions that ought to be imposed are such as will prevent imposition and fraud. 1 apprehend that there are few cases in -which legatees have stronger claims to be treated as children than those, in the case at bar, and yet they are excluded from such class by said amendment. But, however much we may feel' like condemning it, the Legislature clearly had the power to impose the condition, and we are compelled to give it effect.

The order appealed from should be modified by inserting a provision imposing a tax of five per cent on the personal property bequeathed to Lucretia W.- Corey and Edgar E." Wheeler, and as modified affirmed, without costs of this appeal to cither party.

Woodward, Jenks, Hooker and Rich, JJ., concurred.

Order of the Surrogate’s Court of Westchester county modified by inserting a provision imposing a tax of five per cent on the personal property bequeathed to Lucretia W. Corey and Edgar F. Wheeler, and as modified affirmed, without costs.  