The words "contemplation of death," as defined in section 27 of the California statute, "shall be taken to include that expectancy of death which actuates the mind of a person on the execution of his will, and in no wise shall said words be limited and restricted to that expectancy of death which actuates the mind of a person in making a gift causa mortis; and it is hereby declared to be the intent and purpose of this act to tax any and all transfers which are made in lieu of or to avoid the passing of the property transferred by testate or intestate laws."

§ 118. Transfers in Contemplation of Death-Illustrations. The following gifts have been held in contemplation of death, and hence subject to inheritance taxation: A gift of corporate stock by a sick man a month or two before death; 24 a conveyance without consideration three days before the grantor submitted to a contemplated surgical operation from which he died; a gift by a father to his daughters of corporate stock, accompanied by the execution by the daughters to him of an irrevocable power of attorney to vote the stock and receive dividends thereon during his life.20

26

25

The following transfers have been held not taxable as transfers made in contemplation of death: An assignment of corporate stock by a husband to his wife three years prior to his death, he having no reason to expect immediate dissolution at the time of the transfer and being able for some time thereafter to attend to his duties and business; 27 an assignment of stock by a man to his wife three weeks before his

the Tennessee statute that a tax is enforceable only where the decedent was "seised" or "possessed" of the estate at the time of his death.

24 Rosenthal v. People, 211 Ill. 306, 71 N. E. 1121; Estate of Benton, 234 Ill. 366, 14 Ann. Cas. 107, 18 L. R. A., N. S., 458, 84 N. E. 1026. 25 Merrifield's Estate v. People, 212 Ill. 400, 72 N. E. 446.

26 Estate of Brandreth, 28 Misc. Rep. 468, 59 N. Y. Supp. 1092. 27 Estate of Graves, 52 Misc. Rep. 433, 103 N. Y. Supp. 571.

death, he being sick abed at the time and having been told by his physician that he should take a long vacation after recovery.28 The soundness of this decision, however, is not free from doubt. Justice Jenks dissented. In writing the prevailing opinion, Justice Woodward stated that the fact that the assignor of the stock died within about three weeks of the assignment, and of the illness with which he was afflicted at the time, had no bearing on the question. "The only point to be determined is whether the transfer was made in the then belief that he was not going to get well; that it was made in contemplation of his impending death, and for the purpose of defrauding the state of the transfer tax; for that is the essence of the matter, and there is no presumption that a man intends to commit a fraud of any kind."

§ 119. Determination of Taxability of Transfer.Whether or not a gift is made in contemplation of death, so as to be subject to the inheritance tax, is a question of fact.29

A contention that a conveyance of real property was made in contemplation of death should not be passed upon without notice to the grantee, against whom the tax must be assessed, if at all.30

28 Estate of Mahlstedt, 67 App. Div. 176, 73 N. Y. Supp. 818.

29 People v. Kelley, 218 Ill. 509, 75 N. E. 1038; Estate of Benton, 234 Ill. 366, 14 Ann. Cas. 107, 18 L. R. A., N. S., 458, 84 N. E. 1026. A question of fact, which the court of appeals cannot review, is involved on an appeal from an order of the appellate division reversing, "upon the facts and the law," the surrogate's decree confirming the report of an appraiser levying a tax, where the surrogate rejected and the appellate division accepted the version of the beneficiary's story most favorable to herself: Estate of Thorne, 162 N. Y. 238, 56 N. E. 625.

In Estate of Crary, 31 Misc. Rep. 72, 64 N. Y. Supp. 566, it is affirmed that the finding of an appraiser, after full and fair investigation, that a transfer two months before death was not taxable, would not be dis turbed on appeal.

30 Estate of Wood, 40 Misc. Rep. 155, 81 N. Y. Supp. 511.

§ 120. Gifts Inter Vivos or Causa Mortis.-The New York courts, following the dictum in Estate of Seaman," have in a number of cases announced that gifts in contemplation of death, within the meaning of the inheritance tax laws, refer only to gifts causa mortis, and do not embrace, unless the transfer is made with intent to evade the law, gifts inter vivos made in contemplation of death.32 But this error has been repudiated, especially in the later New York decisions, and "gifts in contemplation of death" have been given a more comprehensive meaning, and not restricted to donations technically known as causa mortis. "It would therefore appear," to quote from a recent decision, "that in determining whether the gift was made in contemplation of death, the courts should not be restricted to those cases where the circumstances (such as that the gift was made when the donor was in extremis, or was dangerously ill, or in danger of immediate death, or afflicted with an acute disease) would indicate the existence of those conditions necessarily requisite to the validity of a gift causa mortis, but rather that the facts and circumstances surrounding the making of the gift be taken into consideration and a determination arrived at as to whether such facts and circumstances indicate that the gift was made while the donor contemplated the probability of his own death in the immediate future, or whether

81 Estate of Seaman, 147 N. Y. 69, 41 N. E. 401.

32 Estate of Spaulding, 22 Misc. Rep. 420, 50 N. Y. Supp. 398; Estate of Edgerton, 35 App. Div. 125, 54 N. Y. Supp. 700, judgment affirmed in 158 N. Y. 671, 52 N. E. 1124; Estate of Cornell, 66 App. Div. 162, 73 N. Y. Supp. 32, order modified in 170 N. Y. 423, 63 N. E. 445; Estate of Bullard, 76 App. Div. 207, 78 N. Y. Supp. 491,

33 Estate of Birdsall, 22 Misc. Rep. 180, 49 N. Y. Supp. 450; Estate of Harbeck, 43 App. Div. 188, 59 N. Y. Supp. 362; Estate of Palmer, 117 App. Div. 360, 102 N. Y. Supp. 236.

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or not the imminence of the donor's death was in any substantial sense a direct cause of such gift. The Illinois courts have from the first declined to restrict "gifts in contemplation of death" to gifts causa mortis, but have held subject to inheritance taxation all gifts made in contemplation of death, whether or not they are such as are technically styled gifts causa mortis.35 The same is true of the Wisconsin court. Said Justice Siebecker: "The claim that the words can include only gifts causa mortis attributes to them too restricted a meaning. A transfer valid as a gift inter vivos, if made under circumstances which impress it with the distinguishing characteristic of being prompted by an apprehension of impending death, occasioned by a bodily or mental state which has a basis for the apprehension that death is imminent, would be a transfer made in contemplation of death within the meaning of the law." 36

Gifts causa mortis are within the statute, that is, a gift by one who anticipates death as being near, made to take by that event. The donor has a right to recover back the subject of the gift in case he survives, and the gift is in the nature of a legacy and subject to his debts. The statute embraces all gifts made in contemplation of death, and that language does not naturally or necessarily involve a fraudulent intent.37

§ 121. Transfers to Take Effect at Death.-One of the first devices that suggests itself to accomplish an evasion of inheritance taxation is the making of trusts or other conveyances whereby the grantor or donor

84 Estate of Price, 62 Misc. Rep. 149, 116 N. Y. Supp. 283. 35 Rosenthal v. People, 211 Ill. 306, 71 N. E. 1121; Estate of Benton, 234 Ill. 366, 14 Ann. Cas. 107, 18 L. R. A., N. S., 458, 84 N. E. 1026. 36 State v. Pabst, 139 Wis. 561, 121 N. W. 351.

37 Rosenthal v. People, 211 Ill. 306, 71 N. E. 1121; In re Edwards, 85 Hun, 436, 32 N. Y. Supp. 901, affirmed, 146 N. Y. 380, 41 N. E. 89.

reserves to himself the beneficial enjoyment of his estate during life, and in order to lay such transfers under tribute and add to the public revenue, inheritance tax laws provide that transfers of property to take effect in possession or enjoyment after the death of the donor or grantor shall be liable to taxation. Statutes singling out such transfers are, as already pointed out, free from constitutional objections; 38 and they have frequently been applied, both to transfers of real estate and to transfers of corporate stock and other personalty. They are not given a retrospective

39

38 See sec. 100, ante; Crocker v. Shaw, 174 Mass. 266, 54 N. E. 549; Estate of Keeney, 194 N. Y. 281, 87 N. E. 428.

39 People v. Moir, 207 Ill. 180, 99 Am. St. Rep. 205, 69 N. E. 905; Crocker v. Shaw, 174 Mass. 266, 54 N. E. 549; Estate of Green, 153 N. Y. 223, 47 N. E. 292; Matter of Cruger, 54 App. Div. 405, 66 N. Y. Supp. 636, affirmed, 166 N. Y. 602, 59 N. E. 1121; Estate of Hess, 187 N. Y. 554, 80 N. E. 1111; Matter of Ogsbury, 7 App. Div. 71, 39 N. Y. Supp. 978; Estate of Bostwick, 38 App. Div. 223, 56 N. Y. Supp. 495, affirmed, 160 N. Y. 489, 55 N. E. 208; Estate of Bullard, 37 Misc. Rep. 663, 76 N. Y. Supp. 309; Estate of Skinner, 45 Misc. Rep. 559, 92 N. Y. Supp. 972, order modified, 106 App. Div. 217, 94 N. Y. Supp. 144; Estate of Parsons, 117 App. Div. 321, 102 N. Y. Supp. 168; Estate of Jones, 65 Misc. Rep. 121, 120 N. Y. Supp. 862; Appeal of Wright, 38 Pa. 507; Appeal of Waugh, 78 Pa. 436; Reish v. Commonwealth, 106 Pa. 521; Appeal of Siebert, 110 Pa. 329, 1 Atl. 346.

In Reish v. Commonwealth, 106 Pa. 521, a deed in fee simple was executed and a bond taken for the payment to the grantor, during his life, of one-half of the net income, and it was held the deed was intended to take effect in possession or enjoyment after the death of the grantor, and the estate was subject to an inheritance tax.

In Appeal of Seibert, 110 Pa. 329, 1 Atl. 346, a will was made devising real estate, and the testator then made a deed conveying his lands to persons named, to be disposed of as directed in his will. The land was held subject to an inheritance tax.

If a father and his sons form a partnership and on the same day he conveys real property to them, the income from which is ever afterward during his life carried to the partnership account, such lands, after his death, are subject to the inheritance taxes to the extent of his interest or share in such partnership: People v. Moir, 207 Ill. 180, 99 Am. St. Rep. 205, 69 N. E. 905.

In Blair v. Herold, 150 Fed. 199, affirmed in Herold v. Blair, 158 Fed. 804, 86 C. C. A. 64, a partnership agreement entered into in good faith