besides what he was to pay out of it. James sold to John his share for thirty-five hundred dollars and John sold part of this for fifteen hundred dollars. Later, at the request of John, James released all claims under his father's will on condition that John should convey all the land to James's children, they to take possession at John's death and give up an obligation for the two thousand dollars payable after his death. John died unmarried and without issue, and it was held that the share of the land which had belonged to John originally is subject to the tax, but the portion of James is not subject to tax. Substantially it was agreed that the children of James should purchase back that share after John's death by refunding to his estate what he had paid their father for it. Their notes for two thousand dollars have gone into the inventory of the present estate, which is of course to pay the tax. Part of the consideration was that John should convey the entire estate to his nephews and nieces. But it cannot be said that this share was John's at the time of his death, or that it was within the spirit of the proviso in the will. It is not found or pretended that the object was to evade the tax, and the note given for the transfer excludes such a pretension. Had James continued the owner under his father's will, it would have passed to the children on his death and there would have been no claim upon it by the state for the tax on the estate of John.

Appeal of Waugh, 78 Pa. St. (28 P. F. Smith) 436.

Sec. 125. Where Property Burdensome to Grantor.

Gifts have been sustained made by aged persons or those in failing health on the ground that the care of property was a burden to them.

In re Spaulding, 163 N. Y. 607, 57 N. E. 1124, affirming 49 N. Y. App. Div. 541. In re Mahlstedt, 67 N. Y. App. Div. 176, 73 N. Y. Suppl. 818. In re Groves, 52 Misc. 433, 103 N. Y. Suppl. 571.

The testator was the president and the owner of nearly all the stock in a corporation, and it was his duty to sign all corporation notes, drafts, checks and other papers, but this duty becoming burdensome during his illness and he having been told by his physician that when he recovered he would have to take a long vacation, he expressed the desire that he might transfer his stock to his wife, so that she could become a member of the company at once and transact the business in his place. He did this, retaining only one share for himself so that he might continue to be a member of the company and have a right to vote at its meetings.

The court holds that this is not a transfer in contemplation of death although the testator died within three weeks after the transfer. The testator had a natural right to give this stock to his wife, and his wife took possession of it and voted upon

it and the circumstances under which it was transferred show that his death was not in mind in making the transfer. The fact that he made a will on the same day was not evidence of the contemplation of death except as a remote contingency. There is a strong dissenting opinion on the ground that the testator had been advised to put his worldly affairs in order and that he was too weak to sign the assignment and was at the time desperately ill, and that positive evidence of an intention to evade the statute should not be required. In re Mahlstedt, 67 N. Y. App. Div. 176, 73 N. Y. Suppl. 818.

Sec. 126. Purpose to Reduce Estate to Affect Widow's Election as to Dower.

Where an old man suffering from an incurable disease makes gifts of a large portion of his property to various relatives because he is afraid that his wife will claim her statutory dower in his property, which on her death would go to his stepson, and where the object of the gifts to relatives is to avoid this result by reducing the estate so that the wife by self-interest will desire to take under his will and not her statutory interest, this gift is made "in contemplation of death" within the language of the Illinois statute. In re Benton, 234 Ill. 366, 84 N. E. 1026.

Sec. 127. Where Deed Never Delivered.

Where the testator had given a deed of the property in question to the sister, which deed the court finds never was delivered until after the death of the testator, the property remained the property of the testator and subject to the inheritance tax.

Appeal of Davenport (Pa. 1888), 14 A. 346. See also In re Jones, 65 Misc. 121, 120 N. Y. S. 862.

See further, post, s. 164.

Sec. 128. Where Deed Never Recorded.

A tax may be imposed where the deed is never recorded and remains in the possession of the grantor,' but where the transaction is for consideration no tax will be imposed, though the deed is never placed on record.2

1 In re Jones, 65 Misc. 121, 120 N. Y. Suppl. 862.

2 In re McCormick, 15 Pa. Co. Ct. 621, 3 Pa. Dist. 838, 25 Pittsb. Leg. Int. N. S. 91.

Sec. 129. Deed Executed before Statute Enacted.

A transfer before the statute was enacted cannot be in contemplation of death within its meaning.

In re Hendricks, 3 N. Y. Suppl. 281, 1 Con. Surr. 301. In re Demers, 41 Misc. Rep. 470, 84 N. Y. Suppl. 1109.

Sec. 130. Liability of Executors.

Where a decedent makes a deed in contemplation of death, his executors should be made to pay the tax.

Appeal of Wright, 38 Pa. St. (2 Wright) 507. See In re McKennan, 25 South Dakota 369, 126 N. W. 611, reversed on rehearing, 130 N. W. 33.

As to the liability of executors see further, post, s. 317.

Transfers by deeds are commonly taxable only when made without consideration. The consideration has been upheld where it consists in an agreement to erect a monument,2 or to pay the transferror an annuity, or by a mother to surrender an illegitimate child,' or an oral waiver of a previous written contract. So where a son was in partnership with his father under a contract which provided in part that on the father's death his interest in the partnership should belong to the son, this is not a transfer taxable under the United States statute of 1898, as the son had vested rights under the partnership agreement during the life of the testator." 1 In re Palmer, 17 N. Y. App. Div. 360, 102 N. Y. Suppl. 236. Blair v. Herold, 150 Fed. 199, 158 Fed. 804, 86 C. C. A. 64.

Where the decedent conveyed a farm to his nephew for a good consideration and where the deed was never placed on record until after the grantor's death, the transfer is not subject to an inheritance tax in the absence of evidence of intent to convey. In re McCormick, 15 Pa. Co. Ct. 621, 3 Pa. Dist. 838, 25 Pittsb. Leg. Int. N. S. 91.

2 In re Edgerton, 158 N. Y. 671, 52 N. E. 1124, affirming 35 N. Y. App. Div. 125, 54 N. Y. Suppl. 700.

3 In re Edgerton, 158 N. Y. 671, 52 N. E. 1124, affirming 35 N. Y. App. Div. 125, 54 N. Y. Suppl. 700.

4 In re Demers, 41 Misc. 470, 84 N. Y. Suppl. 1109.

Lamb v. Morrow, 140 Iowa 89, 117 N. W. 1118, 18 L. R. A. N. S. 226.

Blair v. Herold, 150 Fed. 199, affirmed in 86 C. C, A. 64, 158 Fed. 804. [Bequest to creditor, see post, s. 236.]

Sec. 132. Deed Made under Contract to Sell.

At the time of the decedent's death she was under contract to sell lands in another state and left a conveyance thereof which was delivered on the day after her death in consideration of the price named in the contract. As the land was not subject to tax

there is no tax on its proceeds.

In re Baker, 67 Misc. 360, 124 N. Y. Suppl. 827.

Sec. 133. Ante-Nuptial Contract.

An ante-nuptial agreement for settlement of property made in good faith is not subject to tax,' even where the husband transferred certain stock to the wife, and the next day she transferred the same stock back to him as trustee to apply to the mutual use of the parties during their joint lives. This is not a gift to the wife in contemplation of death. The court holds that the two agreements are not contemporaneous.2

1 In re Baker, 178 N. Y. 575, 70 N. E. 1094, affirming 83 N. Y. App. Div. 530, 38 Misc. 151, 77 N. Y. Suppl. 170.

2 In re Miller, 77 N. Y. App. Div. 473, 78 N. Y. Suppl. 930, overruling 75 N. Y. Suppl. 929.

Sec. 134. Transfer by Will for Consideration.

It seems to be immaterial for purposes of the inheritance tax whether the transfer by will is a gratuity or is for consideration.

The will of Jay Gould recited that his son having conducted his business for many years with great ability he had fixed the value of the son's services at five million dollars; and evidence was introduced that this legacy was by agreement in view of the son's services and was for compensation and no other purpose. The court holds, however, that the New York statute does not limit the tax to property "gratuitously given by will," but that the word "transfer" covers the gift by will, whatever the method may be, whether to pay a debt, or to discharge a moral obligation, or to benefit a relative for whom the testator entertained a strong affection. In re Gould, 156 N. Y. 423, 428, 51 N. E. 287, modifying 19 N. Y. App. 352.

Under the Massachusetts statute of 1909, chapter 490, part IV, section 1, a transfer for a consideration is not exempt from tax unless "the consideration, whatever form it may assume, is not only valuable, but full, by covering the value in money, or the equivalent in money of the property transferred. . . . If services rendered, or to be rendered, constitute the consideration . . . their value may be inquired into and ascertained, and where in "money's worth" they equal or exceed the fair value of the property at the death of the transferror, no tax can be imposed. If they fall below such value, there is no provision for a reduction, leaving the excess only to be taxed as a gratuity.' Per Braley, J., in State Street Trust Co. v. Stevens, 209 Mass. 373, 95 N. E. 851.