But a divorced wife of a son is not.

Matter of Merritt, 155 App. Div. 228; 140 Supp. 13.

A legacy to the husband of a daughter was held exempt under an early statute although the daughter died before the testator. Matter of Woolsey, 19 Abb. N. C. 232.

Matter of McGarvey, 6 Dem. 145.

And this was so even if the husband remarried prior to the transfer to him.

Matter of Ray, 13 Misc. 480; 35 Supp. 481.

But, in the absence of statute, a son-in-law is a stranger.

King v. Eidman, 128 Fed. 815.

Half brothers were included in the exemption of brothers under the Ohio Statute.

Ormsby's Estate, 7 Ohio N. P. 542.

A statute relating to "brothers and sisters" was held to include brethren of the half blood.

People v. Eliff (Colo.), 219 Pac. 224.

Nephews and nieces by marriage are not included in the rates as to nephews and nieces.

Bates' Estate, 7 Ohio N. P. 625.

3. Effect of divorce.

An absolute divorce severs the relationship for all purposes of inheritance taxation. Treasurer Edwin H. Hoyt, of Iowa, discusses thus the question in his pamphlet on the inheritance tax law of that State: "The question of the right of the State to collect the tax from a divorced wife who has been named a legatee in her former husband's will has not been determined in this State. However, there is a well established line of authorities in this State holding that an absolute divorce puts an end to all rights resting upon the marriage and not actually vested, and that upon divorce all interests, or rights, in property of the other are fully barred and terminated. See Marvin v. Marvin (1882), 59 Iowa 699; 13 N. W. 851; Hamilton v. McNeil (1911), 150 Iowa 470; 129 N. W. 480. It would therefore appear that in case a divorced wife is made a beneficiary under the will of her former husband that she should be subject to the tax fixed by law upon succession to the property."

Heirs to real estate take their title pursuant to the laws of the situs of the real property and not to the devolution prescribed by the State in which the testator was domiciled.

Legatees of personal property on the other hand must look to the statutes of the State where the testator resided for the protection of their rights and not to those of their own domicile.

No statute to which the attention of the authors has been called taxes bequests to a resident heir or legatee when the decedent and the property are not within the jurisdiction of the State of their domicile, though such a tax would probably be sustainable on the theory that it is an excise on the right to receive.

A. HEIRS TO REAL ESTATE.

This generic term is applied whether the succession is by will or pursuant to intestate law. Under the New York procedure the record title should be perfected by a "Probate of Heirship" even where there is no will but this and kindred topics belongs to a general work on real estate and is beyond the scope of this book.

1. Lien of the tax.

Most of the statutes make the tax a lien on the land even as against purchasers in good faith. They also provide that the tax shall be presumed to be paid after six years.

Matter of Strail, 195 N. Y. 575.

But this is only as to a purchaser for value. As to the beneficiary the lien remains.

Matter of Strang, 117 App. Div. 796; 102 Supp. 1062.

Several recent litigations have turned on the question of the lien of the tax. In Iowa it was held that the lien is on each share transferred and not on the entire estate.

Eddy v. Short, 190 Ia. 1376; 179 N. W. 818.

The lien of the tax continues until it is settled and satisfied except that the lien ceases or terminates at the end of five years as against the purchaser of the property.

People v. Baldwin, 287 Ill. 87, 90.

The fact that an inheritance tax has not been paid does not preclude an heir from taking possession. Such possession or a sale by him is merely subject to the lien of the tax.

Bonvillain v. Richaud, 153 La. 431; 96 So. 21.
Barbarich v. Meyer, 154 La. 325; 97 So. 459.

In Iowa it is held that the lien of the tax does not extend to the entire estate but rests only upon the share of each beneficiary as it accrues.

Waterman v. Burbank, 196 Ia. 793; 195 N. W. 191.

Where specific property is charged with the lien of the tax it is not a lien on the residuary estate.

Nation v. Green, 188 Ind. 697; 123 N. E. 163.

As the tax is on the transfer and not on the property the imposition of the tax does not imply a lien and such lien only accrues when the statutory steps to create it have been complied with.

Archibald v. Maurath, 92 N. J. Eq. 357; 113 Atl. 6.

The difficulties that beset the courts in the interpretation of the transfer tax statute is illustrated in the case of Smith v. Browning, where the Appellate Division held that the lien of the tax is on the entire estate and not on property transferred to any one individual. This was reversed by the Court of Appeals, which has just decided that the lien is on the appraised value of each interest bequeathed and not upon the gross amount of several bequests to one individual, and that therefore the tax due on personal property is not a lien on the real estate.

Smith v. Browning, 171 App. Div. 279; 157 Supp. 71; reversed 225 N. Y. 358.

So, where the tax has not been fixed, a motion to compel a purchaser to take title will be denied.

Kitching v. Shear, 26 Misc. 436.

Even where the tax remains a lien as against a bona fide purchaser there is no personal liability upon him.

Wilhelmi v. Wade, 65 Mo. 39.

The lien is no bar to an action to recover the land from a third person even though it is subject to sale in default of the payment of the tax.

Weller v. Wheelock, 155 Mich. 698; 118 N. W. 609.

Nor does it render the title defective so as to avoid the sale when the proceeds of the sale are in the hands of the executor; in that case the lien applies to the proceeds and not to the land.

Mandel v. Fidelity Trust Co., 128 Ky. 239; 107 S. W. 775.

So, where a will directs the sale of property within five years to pay certain legacies in cash, the lands themselves are not subject to a lien for payment of transfer taxes, but it attaches to the funds so realized.

Brown v. Laurence Park Realty Co., 133 App. Div. 753; 118 Supp. 132.

When the representatives of the estate have paid the transfer tax on real property to which the heirs succeed out of personalty, they are subrogated for the benefit of creditors to the claim of the State to the amount of the tax so paid against those to whom the property descends.

Hughes v. Golden, 44 Misc. 128; 89 Supp. 769.

Where the decedent was a cotenant of land on which other cotenants had made improvements, and where each cotenant presumed and knew what the others were doing, and the improvements were made under such conditions that on partition the cotenants would be entitled to allowance for the improvements, only the balance of the interest of the decedent should be taxed, notwithstanding the fact that no proceeding for contribution had been commenced, and notwithstanding the fact that it might be claimed that no contribution would ever be asked. Still this does not justify the taxation of property that the decedent did not own, which does not pass to the heirs at law as her property.

Matter of Wood, 68 Misc. 267; 123 Supp. 574.

In a suit to quiet title it is held that the tax need not be paid as a condition precedent under the California practice. This seems contrary to the general rule.

Nickel v. State, 179 Cal. 126; 175 Pac. 640.

2. Partition.

The fact that under partition proceedings the plaintiff's equitable interest in certain real estate was satisfied by an assignment to him of personal property, does not relieve him from the payment of a succession tax on his share of the estate, for the reason that he received the full value of the real estate in other property assigned to him belonging to the same estate.

Scholey v. Rew, 90 U. S. (23 Wall.) 331, 349.

Where a decedent owned an undivided third of an entire tract of land, partition of his interest could not have the effect of apportioning the lien and fixing a part thereof exclusively on any one lot. Appeal of Mellon, 114 Pa. St. 564, 574; 8 Atl. 183.

3. Equitable conversion.

This term has been defined as "a change in the nature of property by which, for certain purposes, real estate is considered as personal, and personal estate as real, and transmissible and descendible as such.'

Haward v. Peavey, 128 Ill. 430; 21 N. E. 503.

Except in Pennsylvania the doctrine of equitable conversion is not applied in transfer tax law.

Connell v. Crosby, 210 Ill. 380; 71 N. E. 350.

McCurdy v. McCurdy, 197 Mass. 248; 83 N. E. 881.
Matter of Bartow, 30 Misc. 27; 62 Supp. 1000.

But where decedent's will directed that his real estate be converted into cash and so distributed, one of the beneficiaries died before the sale of the real estate, leaving a will disposing of her interest in her father's estate to her husband, held, that for purposes of the Transfer Tax Law it should be treated as personalty.

Matter of Mills, 86 App. Div. 555; 67 Supp. 956; 84 Supp. 1135; aff. 177 N. Y. 562; 69 N. E. 1127.

Where the deceased had contracted to sell real estate which was thereafter conveyed by his executors sums due on the contract are personalty and not realty.

Matter of Russell, 119 Misc. 12.