obvious objections and was at once attacked as unconstitutional and was so held by the lower courts, which were reversed on appeal in two recent cases as to half the property transferred, a decision which takes a long step towards judicial legislation.

In the Matter of McKelway, decided by the Court of Appeals May 8, 1917 (221 N. Y. 15, 116 N. E. 358), Judge Pound, writing for the court, said:

"But joint ownership in personal property may be severed by the act of one in disposing of his interest. If the interest of one joint owner passes to a third party he and the other joint tenant become tenants in common. The doctrine of the survivorship applies only if the jointure is not severed. (Williams on Personal Property, pp. 302-306.) The undivided half of this joint property which Mr. McKelway might have effectually disposed of at any time during his life never passed into the absolute ownership of his wife until her husband's death. A transfer tax thereon does not diminish the value of a vested estate and is free from the objections to a tax on vested remainders and reversions as set forth in Matter of Pell (171 N. Y. 48; 63 N. E. 789) or to a tax on contingent remainders as set forth in Matter of Lansing (supra).

As to the one-half which Mrs. McKelway herself owned and had the right to dispose of, the rule of the Pell case must govern. She gained nothing in regard thereto by the death of her husband except as the jus accrescendi eliminated his interest. The right of the survivor of two joint tenants of personal property to the exclusive ownership thereof may be deemed a taxable transfer of onehalf of the joint property but not to the whole. It is taxable only to the extent of the beneficial interest arising by survivorship, which is, as we have seen, the accruer by survivorship of the whole instead of the half. To this extent it was a property rightfully acquired only on survivorship, analogous to an interest created by a power

of appointment under a will executed prior to the enactment of the law taxing transfers, and, therefore, one that could be cut down by the imposition of an excise tax after the joint ownership began. (Matter of Vanderbilt, 50 App. Div. 246; 63 Supp. 1079; 163 N. Y. 597.) The imposition of such a tax violates no contract for neither joint tenant agrees not to terminate the joint tenancy. Mrs. McKelway had no contract with her husband as to the joint property which was not as ambulatory as a will to the last moment of Mr. McKelway's life and, for the purposes of taxation, she is deemed to have acquired his interest in the joint property by his death."

The decision in the McKelway case re-states the law as to joint tenancy and restores it to where it was before the Thompson and Dalsimer decisions, effecting substantial justice at the sacrifice of consistency. As Mr. Emerson says: "With consistency a great soul has simply nothing to do."

In Matter of Teller, decided by the Appellate Division, First Department, June 9, 1917, 165 Supp. 517, the opinion in the McKelway case was held to apply not only to joint estates created prior to the act of 1915; but to those created afterwards, as well. The court said:

"When this appeal was argued it seemed necessary to decide whether the ownership of the property was in the testator and his wife as tenants in common or jointly; but a decision of the Court of Appeals in Matter of McKelway on May 8th, 1917, I think, disposes of all the questions involved on this appeal. That proceeding involved the taxability of personal property held by McKelway and his wife jointly, some of which they acquired before and some after the enactment of this statute, and his death was subsequent to the time the statute took effect. There, as here, the tax appraiser ruled that the property was taxable for its full value as though it passed under the will, and the Surrogate's Court reversed the ruling on the

theory that the only transfer from McKelway was during his lifetime on the creation of the joint tenancy and before the enactment of the statute. The Appellate Division affirmed but the Court of Appeals reversed, holding that the property was taxable to the extent of one-half of its value, on the theory that a joint owner of personal property may dispose of his own interest during his lifetime, and that the doctrine of survivorship applies only if the jointure is not thus severed, and that, therefore, the absolute ownership of the undivided half of the joint property which the deceased joint owner might have disposed of passed to the survivor upon his death, and not until then. The effect of that decision is that the surviving joint tenant has at all times been the owner of an undivided half interest subject to the right of his cotenant to take by survivorship and that therefore that undivided interest was not taxable but that the survivor succeeds to the absolute ownership of the other undivided half interest only by and upon the death of his co-tenant, and that, therefore, such interest is taxable. On that construction of the statute no constitutional question arises, for it does not become retroactive; and since an undivided half interest would be taxable if they held the property as tenants in common the same result follows."

A motion for re-argument is pending before the Appellate Division in the Teller case on the ground that the McKelway case did not involve joint properties created subsequent to the statute.

6. Escheat.

Logically, if the state gets the whole, by escheat, no tax would be imposed - but it often happens that a county gets the funds derived from escheats in which case it must pay the state its inheritance tax.

People v. Richardson, 269 Ill. 275; 109 N. E. 1033.

This is in line with the Illinois doctrine that all common law transfers are covered by a general inheritance tax statute. There seems to be no other case on the subject.

Questions of escheat are often involved with those of presumption of death.

Where a public administrator had obtained letters of administration over an estate consisting of a savings bank account deposited in 1819, there is no presumption from the fact that this money had never been demanded that decedent died prior to the inheritance tax act of 1885. No proof was presented or could be discovered as to what had become of the woman but as there was no presumption of death there could be neither escheat nor inheritance tax although there were no known heirs.

Matter of Bernard, 89 Misc. 705; 152 Supp. 716.

The intestate, a native of Sweden, died on November 17, 1904, in the city of New York, leaving a small amount of money in a savings bank, and, so far as appears, no widow or next of kin in this state. Inquiry failed to disclose any knowledge of him, his family or next of kin. Letters of administration were issued to the public administrator, whereupon the Comptroller of the state of New York applied to the surrogate to have an appraisal of the property subject to a transfer tax.

It was held that there was no escheat but that the deceased was presumed to have next of kin. The court said:

Upon the death of the decedent his personal property vested in the administrator, and his next of kin were entitled to the property upon proving their relationship to the deceased. No such person has appeared and no such person has been found to be in existence. There has been no transfer dependent upon contingencies or conditions whereby they may be wholly or in part created, defeated, extended or abridged.' Matter of Vanderbilt

(172 N. Y. 69; 64 N. E. 782) had relation to a trust estate in which the ultimate beneficiaries were uncertain, and what is said in that case relates to such an estate. The only uncertainty as to the ownership of this property depends upon the fact as to whether the deceased left next of kin. The presumption is that the deceased left next of kin, but there is no presumption that he left a widow or descendants. It is presumed therefore that the property vested in the next of kin of the deceased, and is therefore taxable under section 220 of the Tax Law, and as it does not appear that it is exempt under section 221 of the Tax Law, the tax imposed by subdivision 6 (now subd. 7) of section 220 applies, and it is taxable at the rate of five per cent."

Matter of Lind, 132 App. Div. 321; 117 Supp. 49; aff. 196 N. Y. 570; 90 N. E. 1161.

As we have seen, a bequest to the government, which is in the nature of an escheat, is taxable, under state statutes. United States v. Perkins, 163 U. S. 625; 16 S. Ct. Rep. 1073.

g. CIVIL LAW TRANSFERS.

Under the civil law the wife has a one-half interest in the gains or profits of the matrimonial partnership and succeeds thereto at her husband's demise, under an implied contract at marriage.

1. Taxable.

In California it was held that the wife succeeds as heir to her husband and that the transfer is taxable under the California inheritance tax law.

Estate of Moffit, 153 Cal. 359; 95 Pac. 653, sustained sub. nom.
Moffit v. Kelly, 218 U. S. 400.

But the new California statute (See Appendix) in effect July 27, 1917, exempts a widow's community interest in her husband's property in all cases where death occurs subsequent to that date.