p. 240In the Matter of the Appraisal of the Estate of John S. Tilley, Deceased, under the Acts in Relation to the Taxable Transfers of Property. William Sohmer, Comptroller of the State of New York, Appellant; Rose Emma Tilley, Residuary Legatee and Executrix, Respondent.Headnote
Tax — transfer tax—joint hank deposit with right of survivorship.As section 144 of the Banking Law provides that a deposit made in the name of a depositor and another person, in form to he paid to either or the survivor, creates a joint tenancy with a right to survivorship on the death of either tenant, the joint tenancy is created at the time the deposit is made. It is not “ made in contemplation of the death * * * or intended to take effect in possession or enjoyment at or after such death,” within the meaning of the Tax Law.
Hence, on the death of one joint tenant, no transfer tax can he assessed on his interest in the fund which passes to the surviving tenant.
Appeal by William Sohmer, as Comptroller of the State of New York, from an order of the Surrogate’s Court of the county of Albany, entered in the office of said Surrogate’s Court on the 25th day of May, 1914, in so far as it modified an order heretofore made in these proceedings assessing a transfer tax and exempted from the taxable assets one-half of certain joint savings bank accounts and one trust account held by the decedent as trustee.
William Law Stout, for the appellant.
Merchant, Olena & Merchant [Abel Merchant, Jr., of counsel], for the respondent.
John S. Tilley died a resident of Albany county on the 25th day of March, 1913. During his lifetime, and for a period of about thirty-five years, decedent had been carrying on business in Watervliet; and although his wife does not appear to
p. 242the same together with all interest thereon shall be held for the exclusive use of the persons so named and may be paid to either during the lifetime of both or to the survivor after the death of one of them, and such payment and the receipt or acquittance of the one to whom such payment is made shall be a valid and sufficient release and discharge to said bank, ” etc. This would seem to dispose of the question here presented, for whatever may have been the intention of the decedent he is presumed to have known the law, and when he deposited the moneys in the accounts now under consideration he vested the ownership of such funds in joint tenancy in himself and his wife; it became the property of such persons in joint tenancy; and it is of the essence of a joint tenancy that there shall be unity of interest, unity of title, unity of time, and unity of possession; that is to say, joint tenants have one and the same interest, accruing by one and the same conveyance, commencing at one and the same time, and held by one and the same undivided possession. Neither can be exclusively seized of any particular part of the property, and is cotenant of the other, but each has an undivided moiety of the whole, and not the whole of an undivided moiety. (17 Am. & Eng. Ency. of Law [2d ed.], 649.) The great incident of joint tenancy is the right of survivorship, and by reason of this right the interest of a joint tenant is not descendible, and cannot be devised by will. (17 Am. & Eng. Ency. of Law [2d ed.], 650.) No right passes by the death of one of the parties, for where the deposit is in the joint names of the parties, and the intent appears — as it now must under the statute—to create the joint tenancy, its effect is to vest title in the entire fund in the survivor.
(Farrelly v. Emigrant Industrial Savings Bank, 92 App. Div. 529 , 531; affd., 179 N. Y. 594 .) The right of survivorship vests in the creation of the joint tenancy, and the only question determined by death is which shall take the entire estate. Under such circumstances it is clear that there is no succession to be taxed, for it was not “made in contemplation of the death of the grantor, vendor or donor, or intended to take effect in possession or enjoyment at or after such death.” The possession is given upon the creation of the estate; the rights are absolutely and conclusively fixed, and the only question which
p. 243is contingent is which of two or more joint tenants shall eventually own the entire estate. But each is in full possession, each has full ownership as against all the world, with the exception of the equal right of the others, and the transfer which becomes fully determined at the death of one of two joint owners relates back to the creation of the estate. It was then that the rights vested, and the death only determines which shall be the gainer by the transaction. While there might be a joint tenancy created which would be so obviously fraudulent in its inception as to take it out of the general rule, we are persuaded that where an account is created in the manner permitted by the Banking Law, with all of its incidents known and recognized in the law, it cannot be presumed that there was any other intention than that which the law ascribes to such an act, and that property thus disposed of is not “made in contemplation of * * * death,” as that language is understood in the jurisprudence of this State, nor “intended to take effect in possession or enjoyment at or after such death.” (Tax Law [Consol. Laws, chap. 60; Laws of 1909, chap. 62], §
220, as amd. by Laws of
1911, chap. 732.) If the Legislature deems such dispositions of property to be properly-taxable that is a question which may be dealt with in the proper department, but this court has no power to enlarge upon the scheme of tax laws. (See
Matter of Starbuck, 137 App. Div. 866 ;
Matter of Green, 144 id. 232-234, and authorities cited.)
The order appealed from should be affirmed, with costs.
All concurred, except Smith, P. J., dissenting.
Order affirmed, with ten dollars costs and disbursements.