3. Gifts session. 47 (1)—Continued ownership will be presumed from donor's posIn an administrator's proceeding in discovery to obtain possession of certain bonds claimed by respondent as a gift from decedent, where there was evidence that after the alleged gift the bonds were in decedent's possession, it will be presumed that her ownership continued. 4. Gifts 49 (6)—Evidence held insufficient to support gift. In an administrator's proceeding in discovery to obtain possession of certain bonds claimed by respondent as a gift from deceased, evidence held insufficient to support respondent's burden of proof that the bonds had been given him. In the matter of the estate of Margaret P. Humphrey, deceased. Proceeding in discovery by the administrator against W. A. Evans. Judgment for plaintiff. See, also, 191 App. Div. 291, 181 N. Y. Supp. 169. Blackwell Brothers, of New York City, for petitioner. FOLEY, S. This is a discovery proceeding. The matter originally came before my predecessor, Mr. Surrogate Fowler, who decreed that the bonds in question, of the par value of $14,000, be turned over to the administrator. No trial was had by him, but his decree rested upon a motion for judgment on the opening and upon the answer filed. An appeal was taken to the Appellate Division, which held, in substance. (Matter of Humphrey, 191 App. Div. 291, 181 N. Y. Supp. 169), that the issue of title was sufficiently pleaded in the answer, and the matter was remitted to this court for trial. The trial of the issue of title was had before me. Neither side demanded a jury, so that the determination of the facts is for the surrogate. The decedent died in 1918 at the age of 75 years. At the time of the alleged gift the respondent was apparently 20 years her junior. They were supposed to have been engaged to each other. [1] The burden of proof was on the respondent, who claimed the bonds as a gift. Matter of Canfield, 176 App. Div. 554, 163 N. Y. Supp. 191; Matter of Housman, 224 N. Y. 525, 121 N. E. 357. It is well settled, also, that the proof in such a case must be definite, clear, convincing, strong, and satisfactory. Matter of Van Alstyne, 207 N. Y. 298, 308, 100 N. E. 802; Matter of Wright, 121 App. Div. 581, 106 N. Y. Supp. 369; Matter of Housman, 182 App. Div. 37, 169 N. Y. Supp. 277; Matter of O'Connell, 33 App. Div. 483, 53 N. Y. Supp. 748 Matter of Schroeder, No. 1, 113 App. Div. 209, 99 N. Y. Supp. 137. On the trial the attorney for the respondent reserved a motion to strike out certain testimony of two witnesses, Mrs. Fay and Catherine Brady. This motion was renewed in the brief of respondent. While this practice is not, in my opinion, proper, I have decided to grant the motion. Gick v. Stumpf, 204 N. Y. 413, 97 N. E. 865. This testimony of these two witnesses as to any self-serving declarations of Mrs. Humphrey tending to deny the gift or its effect was not considered by me in arriving at my conclusion. For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes (183 N.Y.S.) The respondent alleges in his answer that the gift was made in July or August, 1915. There is no evidence as to when the gift was actually made. The evidence discloses that Mrs. Humphrey had possession of these bonds after the time of the alleged gift. The bonds were delivered to her on June 10, 1915. On September 28, 1915, she took some of them to the Guaranty Trust Company for the purpose of having them stamped under the Secured Debt Law. When this was done, the bonds were returned to her. On November 13, the American Hide & Leather bonds were also delivered by her to be similarly stamped, and they were returned to her on February 1, 1916. [2] The respondent relies to a great extent on the written declaration of Mrs. Humphrey, dated June 8, 1915, that she wanted to give him the bonds and requested him to call upon her for that purpose. This communication merely expressed an intention to make a gift, and this is insufficient to support the gift, where there is no proof of delivery. Standing alone, it is not sufficient to establish a consummated gift. Intention or mere words cannot supply the place of an actual surrender of control or authority over the thing intended to be given. Matter of Van Alstyne, supra. In Beaver v. Beaver,_117 N. Y. 421, 428, 22 N. E. 940, 941 (6 L. R. A. 403, 15 Am. St. Rep. 531) the court said: * * "The elements necessary to constitute a valid gift are well understood and are not the subject of dispute. There must be on the part of the donor an intent to give, and a delivery of the thing given, to or for the donee, in pursuance of such intent, and on the part of the donee, acceptance. But delivery by the donor, either actual or constructive, operating to divest the donor of possession of and dominion over the thing, is a constant and essential factor in every transaction which takes effect as a completed gift. Anything short of this strips it of the quality of completeness which distinguishes an intention to give, which alone amounts to nothing, from the consummated act, which changes the title. The intention to give is often established by most satisfactory evidence, although the gift fails." Additional evidence of delivery is therefore required. Ridden v. Thrall, 125 N. Y. 572, 576, 26 N. E. 627, 11 L. R. A. 684, 21 Am. St. Rep. 758. But the record here is barren of adequate convincing proof. In Matter of Cohn, 187 App. Div. 392, 176 N. Y. Supp. 225, the memorandum of gift read, "I give this day to my wife," a present gift. In this case the respondent is requested to call upon Mrs. Humphrey, "so that I can give you some bonds which I own; nothing will give me more pleasure than to give you these bonds," words of intention or futurity. * * * Several witnesses testified that in the year 1915 Mrs. Humphrey declared in casual conversations that she was going to give some bonds (not specified and not identified as the bonds here) to Mr. Evans, and later in the year declared that she had given them to Mr. Evans. The fact is that these bonds were still under her control and possession as late as December of that year. The only positive testimony on this point, however, was that given by Dr. Miller. He testified that Mrs. Humphrey told him in October, 1917, that she had given these bonds to Mr. Evans. There is some inconsistency in his testimony on this point, for he testified that in 1916 she said that she intended to give the bonds, which plainly shows that, if this testimony is correct, no gift was made prior to that year. His vivid recollection of the names and the exact denominations of the bonds were sharply in contrast with his haziness upon other phases of this matter. When considered with the contrary proof that Mrs. Humphrey had possession of these bonds long after the date of the alleged gift, his testimony of her admissions is not convincing. The first possession of the bonds in the hands of the respondent is proved to have been on July 5, 1917, when Mr. Evans pledged the United States Steel and American Hide & Leather bonds in question with other stock (10 shares of Baltimore & Ohio Railroad Company, held by the Appellate Division to be the property of Mrs. Humphrey's estate) in his own name for a loan of $10,000 by the Mt. Vernon Trust Company. The Alabama Steel & Shipbuilding Company bonds were not deposited as collateral. A certificate of stock, however, owned by him, was among the collateral. This loan is still open. The proceeds of this loan were used for her own pecuniary purposes. The loan, as testified to by Dr. Miller, was needed in connection with financing certain property in which Mrs. Humphrey, with her relatives, was interested. A new mortgage covering this amount was executed to Evans as mortgagee. The explanation of this, as disclosed by the record, was that, while Mrs. Humphrey was advancing the money to save the property owned by herself and her relations, she desired to have the loan in the name of Evans, so that he might enforce repayment against her relatives. Mrs. Humphrey had previously advanced moneys to them for a similar purpose without subsequent reimbursement. There is also evidence in the record that Mrs. Humphrey feared the entry of a judgment against her about 1916 or 1917, and that Mr. Evans consulted with her attorney about transferring her property to prevent its seizure under execution. [3] Under these circumstances the respondent, in my opinion, has not sustained the burden of proof with evidence that is clear, convincing, strong and satisfactory, or, indeed, with any evidence whatsoever. In the absence of proof of delivery, his possession of the bonds for the first time at a period so remote from the date of the alleged gift, and her proven possession of the same in the meantime, is inconsistent with his title to them. The presumption is that her ownership continued (Matter of Housman, supra). This ownership existed up to 1917, when a different possession is shown for the first time. Furthermore, the possession by Evans in 1917, when he obtained a loan on them for her purposes, is inconsistent with the finding of title in him even at that time. [4] The proof of the facts alleged in the answer of respondent would have established a valid gift of the bonds under the decision of the Appellate Division. Matter of Humphrey, 191 App. Div. 291, 181 N. Y. Supp. 169. The proof now before me does not substantiate the facts pleaded. There is no proof of a gift of the bonds in "July or August, 1915," as alleged, nor, in fact, can any place or date of delivery be fixed by the court from the record. The decedent did not part absolutely with control of the bonds, for she exercised acts of (183 N.Y.S.) ownership over them in 1915 and in 1916, after the alleged gift. And even when possession first is proven to have changed in July, 1917, the proceeds realized on the pledge of the bonds are used in aid of her own property. The entire course of conduct of the parties was consistent with her dominion and authority over them and his mere custody or agency. Matter of Bolin, 136 N. Y. 177, 32 N. E. 626. For these reasons, I find that the gift was not proved. Submit decree accordingly. In re BOWERS' ESTATE. (Surrogate's Court, New York County. June 18, 1920.) 1. Taxation 879 (2) —Securities deeded with right of revocation with trustees' approval are subject to transfer tax. Where an owner of securities conveyed them to trustees under a deed which reserved to himself, subject to the separate consent of the trustees, the power of amendment and revocation, the transfer did not become absolute until his death, and therefore was subject to the transfer tax. 2. Taxation 906-Decedent not liable to penalty for evasion of tax on securities held by trustees. Where securities were held during the lifetime of decedent by trustees under deeds of trust and an antenuptial agreement, it was the duty of the trustees, not decedent, to pay the personal tax or have them stamped under the Investment Law, so that decedent's estate is not liable to the penalty for evasion of the tax imposed by Tax Law, § 221b. In the matter of the estate of John M. Bowers, deceased. Heard on separate appeals by the executors and trustees under the will of decedent and by trustees under deeds of trust and a mutual agreement from the order assessing the transfer tax. Report remitted to appraiser for revision and correction. Scott, Gerard & Bowers, of New York City (Francis M. Scott, of New York City, of counsel), for Bowers' executors and trustees. Paul E. Whitten, of New York City, for other trustees. Lafayette B. Gleason, of New York City (Schuyler C. Carlton, of New York City, of counsel), for State Comptroller. FOLEY, S. There are two appeals from the order assessing the transfer tax in this proceeding-one by the executors and trustees under the will of the decedent; the other by the trustees under deeds of trust and under an antenuptial agreement made by decedent—on the ground that the property transferred by certain of the instruments was not subject to the ordinary transfer tax, and on the further ground that the securities, forming part of the property transferred, were not liable to the tax provided for by section 221b of the Tax Law (Consol. Laws, c. 60). [1] The decedent, in the deeds of trust transferring the property which appellants claim is not taxable, reserved to himself, subject to the separate consent of the trustees, the power of amendment and For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes revocation. Under these conditions the gifts must be considered as transfers which did not become absolute until his death. It is logical to infer that the trustees, under this reservation, might have consented to the revocation or alteration of the trust at the request of the donor, and the court cannot assume that they would have absolutely refused his request to revoke. The possibility existed. The fear expressed by the Court of Appeals in the Bostwick Case, 160 N. Y. 489, at page 494, 55 N. E. 208, at page 210, that "if the trust transfers now in question were held to be without the operation of the act, too dangerous a latitude of action would be permitted to persons who desired to evade its provisions by some technical transfer, which would still leave the substantial rights of ownership in the donor," would be well founded if the donor, to escape taxation of the transfer, could provide for the additional consent of some one who might be entirely subject to his control. The power reserved to the grantor brings this case within the rule laid down in Matter of Bostwick, 160 N. Y. 489, 55 N. E. 208, Matter of Ely, 149 N. Y. Supp. 90, Matter of Miller, 77 App. Div. 473, 78 N. Y. Supp. 930, and Matter of Schermerhorn, N..Y. L. J. Jan. 26, 1913. The corpus of these various trusts is therefore taxable, and the appeal on this ground is denied. [2] The securities forming part of the trusts and the antenuptial settlement, having been under the control of the trustees, and not "held by the decedent" (section 221b), the obligation of paying a personal tax or having them stamped under the Investment Tax Law was on them, and not, during his lifetime, on Mr. Bowers (Cooley on Taxation [3d Ed.] p. 660; Tax Law, § 8; Tax Law, § 336). The provisions of section 221b, imposing a penalty for evasion or nonpayment of the personal or investment tax (Matter of Watson, 226 N. Y. 384, 123 N. E. 758), are therefore not applicable to the securities involved here. The report of the appraiser will be remitted to him for the purpose of revision and correction in accordance with this decision. Order in accordance with this decision signed. In re GREENE'S ESTATE. (Surrogate's Court, New York County. June 17, 1920.) Taxation 868 (1) —Value of shares of railroads incorporated both in New York and Massachusetts should be apportioned for purposes of transfer tax. Under Tax Law, § 220, despite its amendment in 1919, shares of stock of the Boston & Albany Railroad Company and the Fitchburg Railroad Company, both doubly incorporated in New York and Massachusetts, should have their value apportioned for purposes of appraisal for transfer tax levy in New York; the tax not being due on the entire value of the shares. In the matter of the estate of Caroline S. Greene. Application by the executor for order remitting the transfer tax appraiser's report For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes |