In re Riemann, 42 Misc. Rep. 648, 87 N. Y. Suppl. 731. In re De Graaf, 24 Misc. Rep. 147, 53 N. Y. Suppl. 591, 2 Gibbons 516.

Under the law the widow is not put to her election as between dower and the provision by the will; and therefore the value of the wife's dower, since it is not taxable, should be deducted from the gross value of the lands devised to others for the purposes of the inheritance tax. In re Shields, 68 Misc. 264, 124 N. Y. Suppl. 1003. But where the widow fails to elect she is presumed to have elected to take under the will. In re Stuyvesant's Estate, 72 Misc. 295, 131 N. Y. S. 197. People v. Field, 248 Ill. 147, 93 N. E. 721, Billings v. People, 189 Ill. 472, 59 N. E. 798, 59 L. R. A. 507.

Under the Illinois statute of 1895, page 303, section 1, "intestate laws" include the widow's dower. It was contended that dower is of great antiquity and was not created by statute but by the common law; but the court holds that the institution of dower is subject to full legislative control and may be changed or modified at any time. The court holds that the "intestate laws" referred to are those laws of the state which cover the devolution of estates and of persons dying intestate and include all applicable rules of the common law in force in this state and they regulate and control the interest which the widow took in her husband's property at his death. Billings v. People, 189 Ill. 472, 477, 59 L. R. A. 807.

10 Where the testator signed an ante-nuptial agreement by which the wife took a certain sum in lieu of her dower rights on his death, the court holds that this sum taken under the agreement is not exempt from the inheritance tax. It being in lieu of dower it is subject to tax as dower is. The amount received should not be deducted in estimating the market value of the estate. People v. Field, 248 Ill. 147, 93 N. E. 721, referring to Billings v. People, 189 Ill. 472.

"Ill. St. 1895, s. 2, exempting the life estate in any property devised or bequeathed to the wife of the testator, does not apply when the wife renounces the will and elects to take her statutory rights. Connell v. Crosby, 210 Ill. 380, 393, 71 N. E. 350.

Sec. 109. Rights in Community Property.

The inheritance tax on community property depends on whether the survivor takes by inheritance or by virtue of the marriage relation. The tax is levied in California1 and not in Louisiana.2

It was claimed in one case that the surviving wife's share of the property was acquired under the California constitution of 1849, and that therefore the wife acquired a vested right in the community property, which was protected by the federal constitution. The court finds, however, that the declaration in the constitution of 1849, that "laws shall be passed more clearly defining the rights of a wife in relation as well to her separate property as to that held in common with her husband," amounts to no more than a mandate to the legislature to define and prescribe the rights of the wife in the property of the community. It was the design of the constitution of 1849 to preserve so far as might be the rights to the community property which wives had enjoyed. But even under

the Spanish law the wife had no vested estate in the community property, but it was a mere expectancy so long as the community exists. The court finds, therefore, that the California inheritance tax law is not in violation of the federal constitution, on the ground that it takes away a vested interest.

1 The inheritance tax statute was passed presumably in view of the California decisions that the wife took her share of the community property upon the death of her husband by succession as his heir. In re Moffitt's Estate, 153 Cal. 359, 95 P. 653. In re Sim's Estate, 153 Cal. 365, 95 P. 655. People v. Lebus, Cal. 1908, 96 P. 1118.

2 Succession of Marsal, 118 La. Ann. 212, 42 S. 778 (usufruct in community property is taken under marriage contract and not by inheritance). See Succession of Baker, (La. 1911,) 55 So. 714.

In re Moffit, 153 Cal. 359, 95 P. 1025, affirming on rehearing 95 P. 653, deciding the question as to the federal constitution, which was not considered in the original opinion.

Sec. 110. Homestead.

Property set apart by the court as homestead in California is not subject to tax,' although the wife to whom the homestead is set apart is also a devisee and legatee.2

1 The California statute of 1905, c. 314, section 1, provides that all property which shall pass by will or by the intestate laws shall be subject to the inheritance tax. It was claimed that this language included property set apart to the widow as a homestead. The court finds, however, that where the power of setting apart as a homestead is exercised by the probate court, the devisee and legatees take no beneficial interest whatever. The probate court may even set apart as a homestead real property specifically devised by a will and thus defeat the devise. Where it is so set apart as a homestead the title of the person to whom it is so set apart is in no way derived by will, but comes solely from the homestead order. It is clear, therefore, that what the widow takes under this order of the probate court she does not take by will or by the intestate laws of the state. The language, "pass by will or by the intestate laws of this state," means to pass by virtue and force of the law of this state governing testate or intestate succession.

It was further claimed that the property of the testator passed to the devisees and that subsequently by an order of the probate court the homestead was carved out of it. The court says that the right to any tax imposed vested in the state at the moment of death and could not be legally divested by any department of the state, but that the right so vested to the tax imposed by the act; and when it is determined that the act imposed no tax as to property lawfully diverted by the court in probate with the consequence that it could never be distributed to the devisee, legatee or heir, it is apparent that no vested right to the state is impaired. Therefore, the inheritance tax cannot be assessed on such property. In re Kennedy, 157 Cal. 517, 108 P. 280.

In re Kennedy, 157 Cal. 517, 108 P. 280.

CHAPTER XIX.

TRANSFERS IN CONTEMPLATION OF DEATH.

§ 111. Definition.

§ 112. Intent to Evade Tax.

Deed Made before Valid Statute Enacted.

113.

§ 115. Burden on Heirs to Show Good Faith.

§ 116. Heirs of Grantee not Bound by his Statements.

123. Where Decedent Transfers Property to Corporation and Retains Life Interest in its Stock.

§ 124. Conveyance for Consideration where Possession is Postponed till the Death of the Grantor.

§ 125. Where Property Burdensome to Grantor.

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

The words "in contemplation of death" commonly used in the inheritance statutes do not refer merely to that general expectation of death which every mortal entertains,' but to impending approaching decease. The language is not confined to gifts causa mortis,3 and it has been said to be limited only to cases of evasion. The contemplation of death must be the impelling motive, without which the conveyance would not be made, in order to subject a transfer of property to the inheritance tax.5

'The words "in contemplation of death" do not refer to that general expectation which every mortal entertains, but rather the apprehension which arises from some existing condition of body or some impending peril. In re Baker, 178 N. Y. 575, 70 N. E. 1094, affirming 83 N. Y. App. Div. 530, 38 Miss. 151, 77 N. Y. Suppl. 170.

2 "A gift is made in contemplation of an event when it is made in the expectation of that event and having it in view, and the gift when the donor is looking forward to his death as impending and in view of that event, is within the language of the statute." Per Cartwright, J., in Rosenthal v. People, 211 Ill. 306, 71 N. E. 1121.

"The meaning of the words 'in contemplation of death,' as used in the statute, must be inferred and ascertained from the context of the act and the object sought to be accomplished by the law. It is manifest that they were intended to cover transfers of parties who were prompted to make them by reason of the expectation of death, and which, in view of that event, accomplish transfers of the property of decedents in the nature of a testamentary disposition. It is therefore obvious that they are not used as referring to that expectation of death generally entertained by every person. The words are evidently intended to refer to an expectation of death which arises from such a bodily or mental condition as prompts persons to dispose of their property and bestow it on those whom they regard as entitled to their bounty. This accords with the general objects and purposes of the law, namely, the imposition of a tax on the devolution of property involved in the demise of the owner." . . . Per Siebecker, J., in State v. Pabst, 139 Wis. 561, 589, 121 N. W. 351.

3 "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 characteristics 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." Per Siebecker, J., in State v. Pabst, 139 Wis. 561, 589, 121 N. W. 351. In re Spaulding, 163 N. Y. 607, 57 N. E. 1124, affirming 49 N. Y. App. Div. 541, 549.

5 People v. Burkhalter, 247 Ill. 600, 93 N. E. 379.

The words "in contemplation of death" are intended to cover all transfers made with the intention of evading the death duties,1 although intent to evade need not necessarily appear.2

1 In re Thorne, 162 N. Y. 238, 56 N. E. 625, 44 N. Y. App. Div. 8, 60 N. Y. Suppl. 419. In re Spaulding, 163 N. Y. 607, 57 N. E. 1124, affirming 49 N. Y. App. Div. 541, 549. In re Baker, 178 N. Y. 575, 70 N. E. 1094, affirming 83 N. Y. App. Div. 530, 38 Wis. 151, 77 N. Y. Suppl. 170. In re Bullard, 76 N. Y. App. Div. 207, 78 N. Y. Suppl. 491, affirming 37 Misc. 663, 76 N. Y. Suppl. 309.

Where the decedent made an absolute deed of land and took a bond back from the grantee to pay the income to the grantor for his life, this is a conveyance in contemplation of death within the terms of the Pennsylvania inheritance tax of 1826, especially where it was made during the last sickness of the grantor. "It is true, the obligation of the bond was not inserted as a condition or reservation in the deed; it was in form a mere personal obligation; but this contention does not involve a technical question of title nor of lien; the whole matter depends upon the single fact whether or not the transfer was made or intended to take effect in enjoyment at the death of the grantor. The policy of the law will not

§§ 113–116.] TRANSFERS IN CONTEMPLATION OF DEATH.

101

permit the owner of an estate to defeat the plain provisions of the collateral inheritance law, by any devise which secures to him, for life, the income, profits, and enjoyment thereof; it must be by such a conveyance as parts with the possession, the title, and the enjoyment in the grantor's lifetime." Per Clark, J.,

in Reish v. Commonwealth, 106 Pa. St. 521, 526.

The tax is due in a case where the grantor suffered from spinal trouble with a malignant growth and became rapidly worse, and where three days after the making of the grant he made his will and died at the end of a month, although no evidence appeared of his intent to defraud the state of his inheritance tax. No such intention needs to appear. The statute includes all gifts made in contemplation of death, and that language does not naturally nor necessarily involve a fraudulent intent. Rosenthal v. People, 211 Ill. 306, 71 N. E. 1121.

Sec. 113.

Deed Made before Valid Statute Enacted.

Where a transfer was made while an unconstitutional statute was in force, and later before the death of the transferror the court passed an act which was valid, the court says that it is possible that the parties may have had the possibilities of an inheritance tax in mind, but the law which the state was attempting to apply was not then in force and the case therefore does not present the question of the effect of a transfer of property with the intention and for the purpose of avoiding the operation of an existing inheritance tax law.

State v. Probate Court, Washington County, 102 Minn. 268, 286, 113 N. W. 888. Whether tax retroactive as to gifts inter vivos, see ante, s. 84.

Sec. 114. A Question of Fact.

The question whether a deed is made in contemplation of death is a question of fact on which the finding of the trial court is final.

People v. Kelley, 218 Ill. 509, 75 N. E. 1038. In re Bullard, 76 N. Y. App. Div. 207,78 N. Y. Suppl. 491, affirming 37 Misc. 663, 76 N. Y. Suppl. 309. In re Thorne, 162 N. Y. 238, 56 N. E. 625, 44 N. Y. App. Div. 8, 60 N. Y. Suppl. 419.

Sec. 115.

Burden on Heirs to Show Good Faith.

The heirs of the grantor are usually the only persons who can show the nature of the conveyance, and a lack of evidence on this question shows a lack of good faith.

In re Palmer, 17 N. Y. App. Div. 360, 102 N. Y. Suppl. 236.

Sec. 116. Heirs of Grantee not Bound by His Statements.

The heirs of the grantee are not bound by his statements as to the interest of the grantor.