In re the Estate of Forsyth

The testator died in 1813, and by the death of his widow, on the 26th day of October, 1893, the children of a sister of the deceased became entitled to, the possession of a fund of $40,0'00, which had been held in trust for the use of the widow during her life. And it is now to be determined whether said fund is subject to a transfer tax under that portion of the third subdivision of section 1 of chapter 399 of the Laws of 189,2 which reads as follows:

“ Such tax shall also be imposed when any such person or corporation becomes beneficially entitled, in possession or expectancy, to any property or the income thereof by any such transfer, whether made before or after the passage of this, act.”

In the case of Tallmadge v. Seaman, 9 Misc. Rep. 303, it is *187held that this provision relates only to a transfer by conveyance, and that undoubtedly is the strict grammatical and logical construction to be given this sentence, occurring as it does in the same paragraph with transfers of that character. But the use of the word, “ also ” (“ such tax shall also be imposed when,” etc.), makes it doubtful whether the legislature intended so limited a construction; rather, possibly, it was intended to include transfers by wills. Added force to this possibility is given by the fact that beneficial interests in possession or expectancy are generally created by wills rather than by deeds. However, even if transfers by wills are included in this provision, such transfers are only made subject to the tax when the person or corporation becomes beneficially entitled, whether the transfer is made before or after the passage of this act. Becoming beneficially entitled is quite a different thing from becoming entitled to actual possession. In this case the legatees became beneficially entitled to their rights in the testator’s property at his death in the year 1873. At the time of that event the transfer by the will of their beneficial interest occurred, while they only became entitled to the actual possession of the property at the death of the widow.

• The transfer of the beneficial interest having occurred before the passage of this or of the previous acts, it is not subject to the tax, unless the act is intended to be retroactive. To conclude that this clause in the act was intended to be retroactive would be to extend its effect beyond the scope of the remainder and principal part of the act, which is not a necessary construction, and is improbable. It is very much more probable that it was intended simply to have this clause, in harmony with the rest of the act, cover transfers, if any there should be, whereby, either by will or deed, whether executed before or after the passage of the Act, a person or corporation thereafter should become beneficially entitled to any property. See In re Brooks’ Estate infra. I therefore conclude that no tax is due, and that the appointment of an appraiser will be unnecessary.

Decreed accordingly.