Keeney v. Comptroller of the State of New York

On June 13, 1903, Susan A. Keeney, a resident of New York, being in good health, executed in Kings county a deed, whereby she conveyed a cattle ranch in Texas and certain stocks and bonds to the Fidelity Trust Company of Newark, New Jersey, in trust, to hold the same during her lifetime, and to divide the net income equally between herself and her three children, two of whom reside out of the state of New York. The deed further provided that after her death the trustees should pay the entire income, or transfer the property, to her children, or their issue, on terms and limitations not material to this investigation. In the deed she 'reserved the right to revoke or alter the whole or any part of the trust conveyance, at any time after six months' notice in writing.' She died March 29, 1907, being at the time a resident of Kings county, leaving an estate of the value of $25,000 and the three children as sole heirs at law.

In tax proceedings the proper officers found that the stocks and bonds were of the then value of $773,600, one fourth ($193,400) being for the use of Mrs. Keeney for life, and the remainder to her children, being intended to take effect at her death. It was held that their interest was subject to the tax imposed by the New York statute of 1896, which provides:

'A tax shall be and is hereby imposed upon the transfer of any property, real or personal. . . or of any interest therein or income therefrom, in trust or otherwise. . . . 3. When the transfer is of property made by a resident, or by a nonresident, when such nonresident's property is within this state, by deed, grant, bargain, sale, or gift 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.' [Laws of 1896, chap. 908, § 220.]

Mrs. Keeney's administrator and children appealed on the ground that the taxable transfer act of New York, in so far as it imposes a tax upon property transferred inter vivos, violated the 14th Amendment, in that it took the property without due process of law, and the different rates of taxation and classification were of such discriminatory a character as to deny the equal protection of the law.

The judgment was affirmed. The case is here on writ of error from the final order of the surrogate court, entered in pursuance of the mandate of the court of appeals. 194 N. Y. 281, 87 N. E. 428.

Messrs. George F. Canfield and Karl T. Frederick for plaintiffs in error.

[Argument of Counsel from pages 527-529 intentionally omitted]

Mr. William Law Stout for defendant in error.

[Argument of Counsel from pages 529-533 intentionally omitted]

Mr. Justice Lamar, after making the foregoing statement, delivered the opinion of the court: