The nineteenth finding may be stricken out as superfluous. The parties are requested to submit to the court within 10 days proposed conclusions of law from the findings, and, when these shall have been passed upon and made by the court, the judgment will be affirmed, but without costs to either party.

This case was argued December 8, 1916. Mr. Justice CARR, then a member of this court, sat with the court on that day. On March 1, 1917, Mr. Justice BLACKMAR became a member of this court, in place of Mr. Justice CARR, who was temporarily relieved. Mr. Justice CARR never resumed his duties as a member of this court up to the time of his death, and consequently took no part in this decision. Judgment affirmed, without costs. The parties are requested to submit to the court, within 10 days, proposed conclusions of law.

MILLS, RICH, and PUTNAM, JJ., concur.

KILSBY V. NICHOLS et al.

(Supreme Court, Appellate Division, Third Department. December 28, 1917.) HUSBAND AND WIFE 15(3)-ESTATES BY ENTIRETY-SALES.

Where a husband and wife, who held an estate as tenants by the entirety, orally agreed to sell their property, but only the husband executed the contract, the wife, before and after the death of the husband having requested payments under the contract and accepted sums paid by the purchaser, treating it at all times as valid, must execute a deed on payment of the entire contract price, and is not entitled to demand repayment by the purchaser of sums received by her husband.

Appeal from Trial Term, Otsego County.

Action by Anna Kilsby against Henry W. Nichols and others. From a judgment for plaintiff, the first-named defendant appeals. Reversed, and judgment ordered for defendant, dismissing plaintiff's complaint, unless plaintiff shall, within 20 days after service upon her attorney of a copy of the order with notice of entry, file a stipulation, etc.

Argued before KELLOGG, P. J., and LYON, WOODWARD, COCHRANE, and SEWELL, JJ.

Charles C. Flaesch, of Unadilla, for appellant.

O'Connor & O'Connor, of Hobart (C. R. O'Connor, of Hobart, of counsel), for respondent.

LYON, J. This action is in ejectment. The plaintiff, as surviving tenant by the entirety, is the owner of the record title of the parcel of land in controversy. In January, 1908, the plaintiff and her husband, Mark C. Kilsby, entered into a verbal agreement with the appellant to sell to him upon contract 18/10 acres of land situated in the town of Unadilla, Otsego county, for the sum of $200, of which $50 was to be paid upon execution of contract, and $25 and interest annually. The parties agreed to meet at an attorney's office in Unadilla February 3d to execute a written contract. Upon that day the husband and the

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

appellant in accordance with the verbal agreement met and executed the contract, which was left with the attorney with the apparent intention that the plaintiff should later call and sign it. This, however, she never did, and the contract remained at the attorney's office up to the time of the trial.

Upon the execution of the contract, the appellant paid the husband $50, and in February, 1909, paid him upon the principal and interest $31 in work, and $3 in cash, which was handed to the plaintiff. In 1910 the appellant paid the husband, in the presence of the plaintiff $7.50 of interest; the payment of the installment of principal then due being waived. The appellant left the interest due in 1911 and 1912, as well as a payment of $25 of principal and $7.50 interest in 1913, with the attorney at Unadilla, who drew the contract, and he handed the three payments to the plaintiff; she signing below the indorsement of the payments, and below the words "leaving principal $100": "Mrs. Annie Kilsby, M. C. Kilsby." She explains her signature by saying that the attorney wished her to sign in order to show who got the money. On March 11, 1914, the plaintiff wrote the appellant:

"When are you going to make a payment on that place? We need the money to pay our bills with. Mr. Kilsey is sick, and I can't get out to earn anything. I have to stay with him all the time. We must have a payment right away; we have got a doctor bill we have got to pay. We know a party that wants to buy the place. If you can't keep up your payments, give up the contract, and we will sell the place to him.

"Yours truly,

Mrs. Annie Kilsby."

The appellant thereupon gave his note, dated February 2, 1914, for $31, payable to Mark Kilsby 90 days after date, with interest, at the Unadilla National Bank, where it was left for collection. The note was paid by the appellant, and on May 26th the plaintiff drew from the bank the proceeds, $31.56, on a check signed by Mark Kilsby, payable to her order, and indorsed by her. On September 17, 1914, Mark Kilsby died. On December 21, 1914, the plaintiff wrote the appellant:

"Would like to hear from you regarding what you can do this time on the place. Can you pay what is back on it? Let us hear from you soon, so I may know what to do."

The appellant answered that he would leave the payment at the office of the attorney at Unadilla, and on February 3, 1915, he left a check there for the interest and $25 of principal, in all $29.50. The plaintiff did not communicate to the appellant any objection to the check being left there, but did not get the check, and in April following brought this action to recover possession of the parcel of land, with $200 damages for detention. The appellant in his answer alleged affirmance and ratification of the contract by the plaintiff, and that he was ready and willing to pay the balance of $50, with interest thereon from February 3, 1915, as it became due, and receive a conveyance of said land. This was the amount of the balance remaining upon the contract after applying the check for $29.50, which he left with the attorney at Unadilla as a payment upon the contract.

Upon the trial the court found that the plaintiff was chargeable with $82.06, being three interest payments of $7,50 each, the payment of $3,

one payment of principal of $25, and the payment of $31.56, and that there was unpaid upon the contract $140.44, with interest from September 17, 1914, and directed that in case the appellant tender to the plaintiff, within 10 days after the entry of judgment, said sum, with the costs as taxed, the plaintiff be required to deliver to the appellant a deed of the parcel of land pursuant to the terms of the contract, and that, in case the appellant fail to tender said amounts within the time specified, the plaintiff recover possession of said parcel of land, with $69 damages for withholding possession thereof, and the costs of the action. From the judgment entered thereon, defendant Nichols has taken this appeal.

While the plaintiff did not sign the contract, she was a party to the verbal agreement to sell, knew the terms thereof, knowingly received portions of the purchase price, and both before and after the death of her husband requested the appellant to make payments upon the contract. The appellant made or tendered the payments called for under the contract, and seems to have acted throughout in the utmost good faith. In view of the evidence, plaintiff should be held to have acquiesced in, and to have ratified and confirmed, the contract. Under the facts disclosed by the record, it would seem to be inequitable to require the appellant to pay a greater sum than the balance remaining unpaid upon the contract.

The judgment should therefore be reversed upon the law and the facts, with costs to the appellant to abide the event, unless the plaintiff shall, within 20 days after the service upon her attorney of a copy of the order entered hereon, with notice of entry, file a stipulation and serve a copy thereof, with notice of filing, upon appellant's attorney, that she will upon demand, and the payment to her of $75, with interest thereon from February 3, 1914, being the balance remaining unpaid of the purchase price of the land, execute and deliver to the appellant a warranty deed of said parcel, conveying the same free and clear of all liens and incumbrances, in which event an order may be entered settling and discontinuing the action, without costs to either party in any court.

The court disapproves of the finding that the defendant has paid no other sums than those mentioned in the findings, and finds as a fact that other payments had been made, so that the balance remaining due on said contract at the time of the trial was $75, with interest from February 3, 1914. All concur.

In re VAN COTT'S ESTATE.

(Supreme Court, Appellate Division, Third Department. December 28, 1917.) 1. TAXATION 879(2)—TRANSFER TAX-TRANSFERS SUBJECT.

The tax imposed by Tax Law (Consol. Laws, c. 60) § 220, as amended, on transfers intended to take effect in possession or enjoyment at or after death of transferor, applies to the transfer, without consideration, on death of a father, of the title to his interest in a partnership, by his agreement with his son, with whom he was a partner, leasing to his son for 5 per cent. interest per annum on $22,000 during the continuance of the partnership, to continue till terminated by death of either, or by mutual consent, his interest in the firm business and property, with provision that the father conveys to the son all the right, title, and interest in the business that the father may own at the time of the dissolution; the father, in case the dissolution is by death of the son, or by mutual consent, to be paid such principal sum, and the son, in case of the dissolution by death of the father, to pay the mother for life 5 per cent. per annum on $11,000, or, at her election, $1,000 a year for not over 11 years. 2. TAXATION 875(1)—TRANSFER TAX-EXEMPTIONS.

Relative to exemptions from the transfer tax, a present transfer without consideration by a father to his son, to take effect on the father's death, of his interest in a partnership, and the father's will, executed the same day, giving the rest of his property to his son and wife, are to be considered as one transfer.

Appeal from Surrogate's Court, Otsego County.

In the matter of the appraisal for taxation of the estate of John W. Van Cott, deceased. From an order of the Surrogate's Court, granting application of Eugene M. Travis, State Comptroller, fixing the transfer tax, the executors, Frank J. and Margelia S. Van Cott, appeal. Affirmed.

Argued before KELLOGG, P. J., and LYON, WOODWARD, COCHRANE, and SEWELL, JJ.

Jerome S. Seacord, of Unadilla, for appellants.

Charles H. Merriam, of Milford, for respondent.

LYON, J. This appeal is from an order of the Surrogate's Court of Otsego county, dismissing an appeal from an order of said court. fixing and assessing the tax to be paid by the estate of the deceased. under section 220 of the Tax Law (Consol. Laws, c. 60; Laws 1909, c. 62, as amended), relating to transfer tax, and confirming the taxing order.

On the 30th day of November, 1912, the deceased and his son Frank J. Van Cott, who were carrying on a copartnership business at Unadilla, N. Y., entered into an agreement by which the father, who had not taken an active interest in the business for some years, leased to the son his undivided interest in the firm business and property, with the right of the son to receive and have all the earnings and profits of such interest until the firm should be dissolved; it being agreed that the copartnership should be continued until terminated by the death of either party thereto, or until dissolved by the mutual consent of the parties. By the agreement, executed under the hands and seals of the

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

parties and acknowledged, the son agreed to assume active control and management of the business during the continuance of the lease, and promised and agreed to pay the father during each year thereof, interest at the rate of 5 per cent. per annum on $22,212.90. In case the partnership should be dissolved by the death of the son, or by mutual consent, the father was to be paid said principal sum. The agreement also provided:

"And the party of the first part does hereby grant, convey, transfer, and assign to said party of the second part, his heirs, representatives, and assigns, all the right, title, and interest said first party may own at the time of the dissolution of the partnership in and to said firm business, property, and assets."

Upon the dissolution of the partnership by the death of the father, the son was to pay to his mother, interest at the rate of 5 per cent. per annum upon $11,156.45 during the term of her life. In case of the dissolution of the partnership by the death of the father, the mother might elect to have paid to her annually $1,000, which should be deducted from the principal, and thereafter interest be paid upon the balance only; the aggregate of the payments of principal not to exceed $11,156.45. Upon the day of the execution of this agreement, the father executed his will also bequeathing "all the rest, residue and remainder of my property and that to which I may be entitled at the time of my death" in trust for the use of the mother, with the exception of $3,000, which was given to members of the family other than the son. Upon the death of the mother the trust estate was to pass to the son. The wife and son were appointed executors. The father died in March, 1916. His will was duly admitted to probate by the surrogate of Otsego county and letters testamentary issued. Upon appraisal of the estate to determine the amount of the transfer tax, the county treasurer, as appraiser, held that the property transferred by said agreement, as well as that transferred by the will, was taxable, and the surrogate accordingly entered a formal order confirming the assessment, and assessed upon the estate a tax of $141.65, having allowed a deduction of $5,000 from the value of the property passing to the widow, and a deduction of $5,000 from the value of the property passing to the son. The surrogate in effect held that the agreement and will should be combined as transferring the property of the decedent. An appeal was then taken from this order to the Surrogate's Court which affirmed the taxing order. From such order of confirmation this appeal has been taken.

[1] The contention of the appellants upon this appeal is that the interest of the deceased in the partnership was not taxable, for the reason that the agreement, being for a valuable consideration and not necessarily taking effect at the time of death, was not a transfer in contemplation of death, within the meaning of the Transfer Tax Law, and hence not taxable, and that, even if the property transferred by the agreement were taxable, the widow and son were each entitled to a deduction of $5,000 from the value of the property transferred by the agreement, and also to an additional deduction of $5,000 each from the value of the property transferred by the will.