Chanler v. Kelsey

Statement by Mr. Justice Day:

This is a writ of error to the surrogates' court of the county of New York, state of New York, but its real purpose is to review a decision of the court of appeals of the state, sustaining an order of the surrogates' court, which imposed a transfer tax upon certain estates arising under appointment by Laura Astor Delano, deceased. 176 N. Y. 486, 64 L.R.A. 279, 68 N. E. 871.

Laura Astor Delano was the daughter of William B. Astor. Upon the occasion of her marriage, in 1844, to Frank H. Delano, Mr. Astor executed a deed in the nature of a marriage settlement, conveying certain real and personal property to trustees in trust to pay the income to said Laura Delano for life, with remainder to her issue in fee, or, in default of issue, to her heirs in fee; and giving her power, in her discretion, to appoint the remainder 'amongst her said issue or heirs, in such manner and proportions as she may appoint by instrument in its nature testamentary, to be acknowledged by her as a deed, and in the presence of two witnesses, or published by her as a will.'

In the years 1848, 1849, and 1865 William B. Astor made other deeds, by way of addition to the original marriage settlement, substantially similar in their terms. That of 1848 conveyed certain real estate to Mrs. Delano for life, with power of appointment as to said premises, or any part thereof, 'to and among her said issue, brothers, sister Alida, or their issue, in such manner and proportions as she may appoint by instrument in its nature testamentary, to be acknowledged by her as a deed in the presence of two witnesses, or acknowledged by her as a will.' The deed of 1849 conveyed to trustees certificates for $50,000 of the public debt of Ohio; 'to hold the same in trust for the benefit of Laura Astor Delano during her life, and at her death to transfer and convey the capital of the said stock to her issue; but, in case she left no issue, then to her surviving brothers and sister Alida and to the issue of any of them who died leaving issue; and said instrument contained a power of appointment to Laura Astor Delano as follows: 'Provided, however, that it shall be lawful for the said Laura, by any instrument executed duly as a will of personal estate, to dispose of the said capital unto and amongst her issue, brothers, sister and their issue, in such shares and proportions as she may think fit, and upon such limitations, by way of trust or otherwise, as, in her discretion, may be lawfully devised." These deeds were absolutely irrevocable, took effect upon delivery, and were not made in contemplation of the death of the grantor.

Laura A. Delano died June 15, 1902, in Geneva, Switzerland, leaving no descendants. By her last will and testament, duly admitted to probate in the county of New York on October 14, 1902, she exercised the power of appointment conferred in the deeds from her father in favor of the plaintiffs in error.

One of the plaintiffs in error, Arthur Astor Carey, a grandson of William B. Astor, and an appointee to whom Mrs. Delano had appointed the property originally conveyed by the deeds of 1848 and 1849, took an appeal from the order of the surrogates' court refusing to dismiss the petition to the appellate division of the supreme court, where it was held that the act under which the tax was imposed, as applied to this case, was unconstitutional. Re Delano, 82 App. Div. 147, 81 N. Y. Supp. 762. The state comptroller appealed to the court of appeals from the decision of the appellate division.

That court sustained the right to impose the transfer tax upon the interests appointed by Mrs. Delano under the powers created by the deeds above referred to. Subsequent decisions were made pro forma and a final order on the last remittitur of the court of appeals was made in the surrogates' court, and the case brought here by all the plaintiffs in error.

Mr. Lucius H. Beers for plaintiffs in error.

[Argument of Counsel from pages 468-470 intentionally omitted]

Mr. David B. Hill for defendant in error.

Mr. Justice Day delivered the opinion of the court: