In re Merriam, 147 Mich. 630, 9 L. R. A. N. S. 1104, 111 N. W. 196, 14 Detroit Leg. N. 6, 118 Am. St. Rep. 561. The court distinguishes the case at bar from the Matter of Bronson, 150 N. Y. 1, which held that bonds and certificates of stock in a New York corporation owned by and in possession of a non-resident, at his domicile out of the state, at the time of his death, were not subject to taxation. In the case at bar there was a credit secured by a mortgage on the lands in Michigan and the evidence of indebtedness, namely the mortgage was in Michigan. The court refuses to follow Matter of Preston, 75 N. Y. App. Div. 250. Callahan v. Woodbridge, 171 Mass. 595, 599 51 N. E. 176 (where the court did not pass on the question). Cases like Blackstone v. Miller, 188 U. S. 189, 23 S. Ct. 277, 47 L. Ed. 439, would seem to lend countenance to this view. Sec. 220. Partnership Interests. Under the Pennsylvania doctrine that the inheritance tax is a tax on property, it is held that the interest of a non-resident partner in a partnership doing business in Pennsylvania is subject to tax there. In re Small, 151 Pa. St. 1, 15, 25 A. 23, 30 Wkly. Notes Cas. 521. In re Small 11 Pa. Co. Ct. 1. Sec. 221. Interest in Real Estate Trust Association. A note of a real estate trust association may be such an equitable interest in the real estate as to be taxable in the state where the land lies. Kinney v. Stevens, 207 Mass. 368, 371, 93 N. E. 586. CHAPTER XXXI. BENEFICIAL INTERESTS TAXED. § 222. All Interests Embraced Unless Specifically Exempted. § 223. "To any Person" May Include Several. § 238. Direction to Fulfill Prior Obligation of Decedent. Sec. 222. All Interests Embraced unless Specially Exempted. The inheritance taxes usually embrace every kind of interest in the estate of a decedent. Att. Gen. v. Pierce, 59 N. C. 240. The terms of the Pennsylvania statute of 1826 were comprehensive enough to include every interest which could pass, whether in possession or remainder. Commonwealth v. Smith, 20 Pa. St. (8 Harris) 100. Sec. 223. "To any Person" may Include Several. The words in the Iowa inheritance tax law of 1896 provide a tax on property which shall pass "to any person." The phrase "to any person" does not necessarily mean one person only, but will include more than one when that is required to give the statute the effect it was intended to have. McGhee v. State, 105 Iowa 9, 74 N. W. 695. Sec. 224. Assignment by Legatee. An assignment by the beneficiary cannot affect the tax. The succession tax cannot be fixed at the rate as in the case of a bequest to the assignee but must be fixed at the rate as in the case of a bequest to the original legatee, as the assignee did not take through the will. In re Cook, 187 N. Y. 253, 259, 79 N. E. 991, reversing 114 N. Y. App. Div. 718, 99 N. Y. Suppl. 1049. Where collateral remaindermen assigned to a lineal life tenant the court was divided on the question as to who should pay the collateral inheritance tax. The majority is of opinion that the whole of it should be paid by the life tenant, on the ground that the life tenant and remainder by virtue of these transfers became vested in the same person, and there was a merger of the two estates into one fee simple estate in her and that she is taxable upon the value of the remainder which entered into the merger. Harrison v. Johnston, 109 Tenn. 245, 70 S. W. 414, 417. Embezzlement by Executor. Where one of the executors previous to the death of the testator had so invested the testator's property that it was worthless and then on his death destroyed his will, one of the legatees by threats of criminal prosecution obtained payment of her legacy from the executor, at the same time assigning the legacy and all her interest in the same to the executor. The legacy was paid with the individual property of the executor. The legacy was two thousand dollars and the total assets of the estate of the testator amounted to less than eight hundred dollars. The court holds that no transfer tax can be levied on this legacy, as the legatee never received any property from the estate and has in fact assigned all her rights against the estate. In re Weed, 10 Misc. Rep. 628, 32 N. Y. Suppl. 777. See further, ante, s. 147. Sec. 225. Disclaimer. Disclaimer by the beneficiaries may prevent the imposition of a tax on them. In re Stone, 132 Iowa 136, 109 N. W. 455. See further, however, ante, s. 153. Sec. 226. Intestacy. Where property passes by intestacy the interests of the heirs may be in part subject to tax and in part not. Dow v. Abbott, 197 Mass. 283, 288, 84 N. E. 96. Sec. 227. What is a Life Interest. Life interests have been created by a bequest over of "that may remain," by a bequest of income during the life of the beneficiary, or so long as she shall remain unmarried, or until her marriage or death unmarried, or where a fee was not created under the rule in Shelley's case.1 1 In re Cager, 111 N. Y. 343, 19 N. Y. St. 497, 18 N. E. 866, affirming 46 Hun 657. 2 In re Wolf, 48 Ohio Wkly. L. Bul. 211. 3 In re Plum, 37 Misc. Rep. 466, 75 N. Y. Suppl. 940. 4 In re Belcher, 211 Pa. St. 615, 61 A. 252. Sec. 228. What Life Estates Taxable. The life tenant is subject to tax as a legatee,1 except possibly in case of a contingent life estate.2 Under the Illinois statute of 1895 the life estate is exempt only when the remainder following its expiration is to the collateral heir or a stranger.3 1 In re Wolf, 48 Ohio Wkly. L. Bul. 211. Fitzgerald v. Rhode Island Hospital Trust Co., 24 R. I. 59, 52 Atl. 814 (under the federal statute of 1898). See In re Cager, 111 N. Y. 343, 19 N. Y. St. 497, 18 N. E. 866, affirming 46 Hun 657. Where a testator died in December, 1901, bequeathing certain property in trust to pay the income to the son for life, the life estate of the son became vested on the death of the testator and was therefore subject to the inheritance tax. Westhus v. St. Louis Union Trust Co., 164 Fed. 795, 90 C. C. A. 441, 168 Fed. 617. When the testator gives the beneficial use of his property for a limited time to one person, after which the corpus of the estate goes to another, it would not be claimed that the right of each legatee is not subject to taxation. The fact that both bequests are to the same individual should not change the result. To hold otherwise would defeat the entire purpose of the statute, which can only be given effect by insisting that when the amount actually paid exceeds the exemption a tax based on that amount is then due. State v. Probate Court, 112 Minn. 279, 128 N. W. 18, 20. ? Where a devise is made to two for life and to the survivor of them, the remainder to the surviving children of M. and remainder in fee to the children of A. and W. if the latter have issue, the life estates of the first takers are alone taxable since it is impossible to tell which of the children of M. will take the second life estate; nor can it be known into what number of shares the estate in remainder will be divided. In re Eldridge, 29 Misc. Rep. 734, 62 N. Y. Suppl. 1026. Ayers v. Chicago Title & Trust Co., 187 Ill. 42, 56, 58 N. E. 318. [Appraisal of life estates, see post, ss. 343-345.] Sec. 229. Principal or Income of Life Estates. Taxes on life interests may be chargeable against the principal,1 or against the income,2 payable only as the income is paid.3 This is so although the legacy was intended for the maintenance of the life tenant who had and has no other means of support, and although the tax was paid by the executor before he transferred the fund to the trustee. The life tenant, although exempt from taxation, has no redress where his income is reduced by the deduction of the tax from the principal.5 1 Minot v. Winthrop, 162 Mass. 113, 125, 38 N. E. 512, 26 L. R. A. 259. In re Bass, 57 Misc. 531, 109 N. Y. Suppl. 1084. Where personal property was given to a life tenant the succession taxes assessed against the net value of the property as a whole are chargeable to principal. Bishop v. Bishop, 81 Conn. 509, 71 A. 583. 2 State v. Probate Court, 100 Minn. 192, 196, 197, 110 N. W. 865. In re Johnson, 6 Dem. Surr. 146. Succession duties under the United States inheritance tax of 1864 on life tenants fall on the income of the fund even where the property is left by will in trust "to receive and collect the income and after deducting all needful and proper costs, charges and expenses, to pay the residue of said income" to the cestui for life. The court holds that the costs, charges and expenses spoken of by the will, which was drafted before the passage of the inheritance tax, are such as are incidental to the management of the trust property, and the receipt, collection and disbursement of the income cannot in any sense include the payment of the tax by law imposed upon the life tenants and beneficial interests in the property. Sohier v. Eldredge, 103 Mass. 345. 3 State v. Probate Court, 100 Minn. 192, 110 N. W. 865. State v. Probate Court, 112 Minn. 279, 128 N. W. 18, 20. A recent Minnesota will provided that if a certain grandson, E. B., survived the testator his estate should go to trustees for the grandson, the principal to be paid the grandson in instalments if he should reach various ages; and if he failed to reach the age designated the trustees should pay the balance in their hands to certain persons and charitable institutions designated in the will. The payment of income is limited in any event to a given number of years; hence, the legacy has none of the elements of a life estate, and the present value of the right to receive the income for a limited number of years cannot be ascertained, for the value depends upon the contingency of his living until the limitation expires. It follows, therefore, that a tax on the income will accrue and become payable as the time arrives for the payment to the beneficiary and that it is the duty of the trustee to deduct the tax from the amount of any instalment of income to which he becomes entitled and pay the amount thereof to the proper officer. State v. Probate Court, 100 Minn. 192, 196, 197, 110 N. W. 865. ▲ In re Christian, 2 Pa. Co. Ct. 91, 18 Wkly. Notes Cas. 88. 5 Mass. St. 1891, c. 425, s. 1, provides that the tax shall be deducted from the principal sum and paid over to the treasurer. Where ten thousand dollars is given in trust for a life tenant, who is exempt from taxation, and the tax diminishes the principal below ten thousand dollars and reduces the income proportionately, there is no warrant for taking any part of the principal of the trust fund or of the estate generally to make up the loss of the life tenant. Minot v. Winthrop, 162 Mass. 113, 38 N. E. 512, 26 L. R. A. 259. Sec. 230. Annuities. Annuities are commonly subject to the inheritance tax,1 and the tax may be collected out of the first payment though the tax exhausts that payment; but where the amount of the annuity is contingent, the tax should be paid on each payment as it is made.3 1 In re Hutchison, 105 N. Y. App. Div. 487, 94 N. Y. Suppl. 354. The testator provided that the trustee under a trust created by him should pay from the trust, including accumulations of income as well as the corpus, at the rate of $14,000 per year to certain persons named; and the court holds that this is a bequest of an annuity and is so taxable, and not as a bequest of income under |