In the Matter of the Transfer Tax upon the Estate of Mathilde Zitzlsperger, Deceased. Gottlieb Maier and George Pfaehler, Jr., Executors and Trustees, Appellants; Eugene M. Travis, Comptroller of the State of New York, Respondent

In the Matter of the Transfer Tax upon the Estate of Mathilde Zitzlsperger, Deceased. Gottlieb Maier and George Pfaehler, Jr., Executors and Trustees, Appellants; Eugene M. Travis, Comptroller of the State of New York, Respondent. First Department, December 30, 1915. Tax — transfer tax—testamentary trust — intestacy contingent on death, of devisee without surviving issue —when transfer should be taxed at one per cent — devise construed. Where a testamentary trust of realty provides that the rents and profits shall be paid to the grandson of the testatrix until he attain the age of twenty-one years, at which time the corpus is devised to him, his heirs and assigns forever, with a proviso that, should the grandson die before attaining the age of twenty-one years leaving issue him surviving, then the lands shall go to the issue share and share alike, a transfer tax of only one per cent should be imposed where the devisee is the decedent’s nearest next of kin, although there is a contingent intestacy in case he dies before attaining the age of twenty-one years leaving no issue him sm-viving. This, because, on the death of the decedent, the lands vested immediately in the devisee subject only to be divested by the happening of the contingency aforesaid, and because, should said contingency happen, the effect would be to create a new title in the devisee as heir at law and nearest next of kin which estate would revert back to and vest at the date of the decedent’s death. It seems, that should the devisee die before attaining twenty-one years of age without leaving surviving issue, the transfer tax should then be levied on the property as his estate and not as the estate of the testatrix. Appeal by Gottlieb Maier and George Pfaehler, Jr., as executors and trustees, from an order of the Surrogate’s Court of the county of New York, entered in the office of said Surrogate’s Court on the 5th day of October, 1915, confirming a prior order fixing and assessing the taxes upon the transfers of property in this estate. Adolph E. Gutgsell, for the appellants. Schuyler C. Carlton [Alexander Otis with him on the brief], for the respondent. [MAJORITY — Dowling, J.:] Dowling, J.: Mathilde Zitzlsperger died at the city of New York on April 1, 1914. By her last will and testament, after making certain bequests, she directed, by the “Fourteenth” paragraph thereof, that the surplus of her personal property “be deposited in trust as hereinafter set forth.” Such surplus was thus included in the trust created as to her realty by the ' ' Sixteenth ” paragraph of her will, by which, after providing for the application of “ the net rents, issues andprofits thereof for and toward the maintenance and education of my grandson Herman Krug until he has attained the age of twenty one years,” she provided for the disposition of any surplus until he became twenty-one, when the same was to be paid over to him. The rents, issues and profits were to be paid over to Herman Krug semi-annually thereafter until he shall have attained the age of twenty-five years, “ when I give, devise and bequeath all my said real estate unto him my aforesaid Grandson, Herman Krug, to have and to hold the same for himself, his heirs and assigns forever, and in case he, my said Grandson should die prior to attaining the age of twenty-five years leaving issue him surviving, then and in that case I give, devise and bequeath all my aforesaid real estate unto such issue, to be divided by and between such issue share and share alike.” It is the contention of the appellants that there were three contingencies which might occur in reference to the trust estate: (1) The cestui que trust attaining the age of twenty-five years, when he would become absolutely entitled to the remainder. (2) The cestui que trust dying prior to attaining the age of twenty-five years, leaving issue him surviving, between whom the entire trust estate was to be divided. The appellants contend that in either of these contingencies, for which the will expressly provides, no higher transfer tax than one per cent could be imposed, as Herman Krug is decedent’s grandson and nearest next of kin. The respondent does not dispute this. But there is a third contingency— the death of Herman Krug before attaining the age of twenty-five years and leaving no issue him surviving, for which the will has made no provision. Appellants contend that in that event decedent Zitzlsperger would have died intestate as to the remainder of the trust estate, and as the same would pass to her heirs at law and next of kin who were such at the time of her death, and as Herman Krug answered both those descriptions, and he was in the one per cent class, no higher tax than this could be imposed on the transfer. On the other hand, respondent claims that at the death of Krug without issue the ultimate beneficiaries of the trust might be in the five per cent class and, therefore, under the Tax Law (Consol. Laws, chap. 60 [Laws of 1909, chap. 62], § 230, as amd. by Laws of 1911, chap. 800) the highest possible rate of tax must be imposed. As we construe the will of decedent, upon her death title to the trust estate vested at once in Krug, subject only to be divested in case of his death before attaining twenty-five years, leaving no issue him surviving. There are no words used in the will indicating any intention to postpone the vesting of title in him. Not only was title at once vested in him as legatee and devisee, but in so far as there was any contingency outstanding, the happening of which would defeat that vesting, upon such happening the effect would be to create a new title in Krug as heir at law and nearest next of kin of decedent, which would revert back to the date of decedent’s death and vest in him as of that date. So that in any event title was in Krug, upon whose interest no higher tax than one per cent could be imposed. (See Tax Law, § 221a, added by Laws of 1911, chap. 732; since amd. by Laws of 1915, chap. «664.) If Krug should die before attaining twenty-five years of age, without leaving issue, the tax then to be levied would be on his estate, and not that of Zitzlsperger. The order appealed from will, therefore, be reversed, with ten dollars costs and disbursements, and the application to reduce the tax on the remainder from five per cent to one per cent granted. Ingraham, P. J., McLaughlin, Laughlin and Scott, JJ., concurred. Order reversed, with ten dollars costs and disbursements, and motion granted as stated in opinion. Order to be settled on notice.