A devise of premises to E., "and at her decease to become the property of her son G.," gives E. a life estate, and a vested remainder to G., which is appraisable and taxable.93

(b) Contingent or Future Estates.

Where, as we have seen," for any reason it becomes impossible to appraise or value at decedent's death any contingent or future estate devised to take effect upon the termination of a preceding estate, or upon any uncertain event, or it cannot be determined to whom such contingent interest will pass, no tax can then be imposed upon such contingent interest until it actually vests in the possession or enjoyment of the heir, devisee, or beneficiary."5

This was the rule announced under the statutes in force prior to 1892, and it was said that in such cases the provision of the statute requiring the remainder-men to file the conditional bond was not applicable."

same rule is adopted in Pennsylvania."

Substantially the

03 In re Grover's Estate (Surr.; 1895) 34 N. Y. Supp. 474.

04 Chapter 5, § 54, subd. d.

95 In re Cager's Will, 111 N. Y. 343, 18 N. E. 866; In re Stewart, 131 N. Y. 277, 30 N. E. 184; In re Curtis (1894) 142 N. Y. 219, 36 N. E. 887, affirming 73 Hun, 185, 25 N. Y. Supp. 909; In re Roosevelt's Estate, 143 N. Y. 120, 38 N. E. 281, affirming 76 Hun, 257, 27 N. Y. Supp. 741; In re Hoffman's Estate, 143 N. Y. 334, 38 N. E. 311, affirming 76 Hun, 399, 27 N. Y. Supp. 1086; In re Le Fever, 5 Dem. Sur. 184; In re Wallace (Surr.) 4 N. Y. Supp. 465, 466, citing In re Bruce (not reported); In re Millward's Estate, 6 Misc. Rep. 425, 27 N. Y. Supp. 286; Talmadge v. Seaman, 85 Hun, 242, 32 N. Y. Supp. 906, reversed as In re Seaman (Oct. 8, 1895; Ct. App.) 41 N. E. 401; In re Wheeler's Estate, 1 Misc. Rep. 450, 22 N. Y. Supp. 1075. Form of order in such cases given under acts of 1885 and 1887. In re Cogswell, 4 Dem. Sur. 248; In re Hopkins, 6 Dem. Sur. 1; In re Le Fever, supra; In re Surrcgate of Cayuga Co., 46 Hun, 657; In re Clark (Surr.) 5 N. Y. Supp. 199; In re Fleming's Estate, N. Y. Law J. Oct. 15, 1889; In re Benjamin, 36 N. Y. Daily Reg. 906.

96 In re Cager, 111 N. Y. 349, 350, 18 N. E. 866; In re Lord, 10 N. Y. Law J. 260.

97 In re Nieman's Estate, 131 Pa. St. 316, 18 Atl. 900. But see In

In Re Cager,* which is the earliest case upon this subject, decedent, Cager, left a life estate to his widow in the property devised, giving her, however, a limited power of disposition during life over the corpus of the estate, with remainder over of what should remain to collateral heirs; and it was ruled that, as she had power during life to dispose of the whole estate by any means except by will, any interest in the other legatees was wholly dependent upon whether the power of disposition " was exercised by the life tenant during her lifetime," and that while it was possible that the remainder-men might eventually take a valuable estate under the will, that event, being contingent upon the nonexercise by the widow of the power of disposition, rendered the present appraisable value of such interest impossible of any correct or reasonable approximate valuation, and hence it was not liable to taxation. The court said: "When the question as to whether any property at all shall pass under the limitation over, and if so, how much, depends upon the will of the

98

re Brewer's Estate, 15 Pa. Law J. (N. S.) 433, 435, 16 Pa. Law J. (N. S.) 114.

* 111 N. Y. 349, 350, 18 N. E. 866.

98 By Rev. St. N. Y. (Banks' 8th Ed.) p. 2446, it is provided: "Sec. 81. Where an absolute power of disposition not accompanied by any trust shall be given to the owner of a particular estate for life or years, such estate shall be changed into a fee absolute in respect to the rights of creditors or purchasers, but subject to any future estate limited thereon in case the power should not be executed, or the lands should not be sold for the satisfaction of debt."

"Sec. 85. Every power of disposition shall be deemed absolute by means of which the grantee is able in his lifetime to dispose of the entire fee for his own benefit."

99 Citing Van Horne v. Campbell, 100 N. Y. 287, 3 N. E. 316, 771; Smith v. Van Ostrand, 64 N. Y. 278; Terry v. Wiggins, 47 N. Y. 512. See, also, In re Le Fever, 5 Dem. Sur. 24. As to when husband does not take an estate in fee, etc., see important case Rose v. Hatch, 125 N. Y. 427, 26 N. E. 467. As to what constitutes power of disposition in life tenant, see Flanagan v. Flanagan, 8 Abb. N. C. 416; Wager v.

first taker, we are unable to see any rule by which such value (of the contingent estate) can be ascertained."

In such cases it was held that, there being no basis upon which the value of the devise over could be appraised, there was no foundation for the imposition of the tax.100

So where the widow, as life tenant, has a right to use the principal to make up a deficiency in the income allowed her under the will, and it appears that the whole estate may be absorbed during her lifetime, there can be no taxation of the remainder.101

And where decedent bequeathed the residue of her estate to her executor, in trust to collect, invest, and pay the net income to her brother for life, with discretionary power to expend certain sums annually for his support, with remainder to collaterals, the court said: 102 "It is impossible to determine how long he (the life tenant) may live, and how much of the principal fund may be used for him by the executor in the exercise of the limited discretion conferred upon him by will; indeed, it is possible that the whole residuum may be exhausted in the use of the discretionary power." 103

And where the remainder-men take upon the contingency of surviving the life tenant, or of reaching a certain age, their interests are not taxable at decedent's death, but only at the time the contingency happens; 104 the rule

Wager, 96 N. Y. 174; Livingstone v. Murray, 68 N. Y. 486; Ackerman v. Gorton, 67 N. Y. 63; Haynes v. Sherman, 117 N. Y. 233, 22 N. E. 938; Thomas v. Wolford (Sup.) 1 N. Y. Supp. 610.

100 In re Cager's Will, 111 N. Y. 349, 350, 18 N. E. 866.

101 In re Fleming's Estate, N. Y. Daily Reg. Oct. 15, 1889. See In re Leavitt (Surr.) 4 N. Y. Supp. 179; In re Millward's Estate (Surr.) 27 N. Y. Supp. 286.

102 In re Hopkins, 6 Dem. Sur. 1.

103 As to discretionary powers, see In re Stewart, 131 N. Y. 586, 30 N. E. 184; Id. (Surr.) 10 N. Y. Supp. 15; and post, § 60.

104 In re Wallace's Estate (Surr.) 4 N. Y. Supp. 465; In re Bruce,

in one case being announced that a contingent remainder is neither appraisable nor taxable until the defeating contingency has been forever rendered impossible of occurrence.105

These rulings, under the early statutes in force until 1892, were, in all respects, subsequently confirmed in elaborate opinions by the court of appeals in Re Curtis, and other cases. 106

In that case the question arose under the act of 1885.107 The facts were that the will of C. created trusts for the benefit of her two daughters, each trust for the life of the beneficiary. The remainders were given, one-half to such of her nephews, and one-half to such of her nieces, named, as should be living at the time of the successive termination of each trust; if any of them should then be dead leaving issue, to such issue. It was held that the remainders were not liable to taxation under the act until the successive termination of each trust; that it could not until then be determined whether the trust fund would pass to persons in whose hands it would be taxable or to others in whose possession it would be exempt, as, in case of the death of the nephews or of the nieces named prior to the expiration of the trust, the one-half of the remainder would go to the heirs at law of the testatrix; also

cited in 4 N. Y. Supp. 466 (not reported); In re Le Fever, 5 Dem. Sur. 184; In re Matthews' Estate, N. Y. Law J. July 27, 1889; In re Fleming's Estate, N. Y. Law J. Oct. 15, 1889; In re Benjamin's Estate, 36 N. Y. Daily Reg. 906.

105 In re Le Fever, supra; In re Benet, N. Y. Law J. March 4, 1889. 106 142 N. Y. 219, 36 N. E. 887 (1894), affirming 73 Hun, 185, 25 N. Y. Supp. 909: In re Roosevelt's Estate (1894) 143 N. Y. 120, 38 N. E. 281, affirming 76 Hun, 257, 27 N. Y. Supp. 741; In re Hoffman's Estate (1894) 143 N. Y. 327, 38 N. E. 311, affirming 76 Hun, 399, 27 N. Y. Supp. 1086. See, also, Talmadge v. Seaman, 85 Hun, 242, 32 N. Y. Supp. 906, reversed as In re Seaman (Oct. 8, 1895;

Ct. App.) 41 N. E. 401. 107 Laws 1885, c. 483.

that, conceding there was, upon the death of the testatrix, a technical vesting of the remainders in the beneficiaries named, this nominal fee might never become a taxable estate.

it cannot be determined whether the property passing by the remainders will be taxable at all; that is to say, whether it will pass actually and beneficially to persons in whose hands it will be taxable, or to others in whose possession it will be exempt. If in the end these remainders go to the nephews and nieces, a tax will be imposed; but if, instead of passing to them, the remainders should go to the children and grandchildren, they would be exempt from taxation. Under this will, however, while we may speculate as to the technical location of the fee pending the running of the trusts, the actual and beneficial interests in remainder may pass wholly to the two daughters by intestacy. If, before the termination of the trusts, the two nieces, children of R., should die without leaving issue or issue living at the supposed date, the will would fail to operate upon one-half of the estate in remainder, and that would devolve at once upon the two daughters as heirs or next of kin. In like manner, if the three nephews should die without issue living, as one of them already has, the other half of the remainder would take the same direction; so that until the termination of the trusts it will be impossible to know whether the remainders are in truth taxable or not. Prior to that event, the state cannot establish that any beneficial interest will pass to persons in whose hands it will be taxable; and, until it can show that vital and necessary fact, its right to tax cannot arise. A time will come, at the close of the trusts, when the question can be settled; and, if then the property passes to the nephews and nieces, the proper assessment can be made and collected. The only possible answer is

*