also to good conduct in service. But these considerations have no application to the case of officers or employés who are not in service at the time the pension system is established or in force. As to such persons the grant of a pension is a mere gratuity.

Neither the case of Cole v. State, 102 N. Y. 48, 6 N. E. 277, nor that of WroughtIron Bridge Co. v. Town of Attica, 119 N. Y. 204, 23 N. E. 542, is authority to the contrary. In the first case the legislature had provided for the compensation of the port warden and harbor masters of the port of New York by fees imposed on the shipping berthed at the wharves in said port. It was held by the supreme court of the United States that the state had no power to impose this tax on the vessels, and the provision for the payment of these officers therefore fell. A statute was then passed which authorized the board of claims to hear and determine the claim of the relator for his services as harbor master. The statute was held valid, and the doctrine of the decision, so far as material to the present case, is this: "It grants no extra compensation. It merely gives jurisdiction to hear and determine a claim for reasonable compensation for services rendered in a case where the compensation attempted to be provided by law failed by reason of the invalidity under the constitution of the United States of the provision for such compensation, and the claimants had consequently rendered beneficial services, accepted and ratified by the legislature, without any valid provision for their compensation." Laws N. Y. 1885, c. 238. Here the services of the relator were rendered under a valid provision for compensation, which was carried out. In the second case the plaintiff had built a bridge under a contract with the highway commissioners of the town, for which the town voted to pay. The proceedings which led up to the execution of the contract were defective, and for this reason the plaintiff failed in an action brought against the town to recover the contract price. Subsequently a statute was passed ratifying the proceedings of the town officers, and thereupon a new action was brought, in which the plaintiff recovered, and the recovery was affirmed by this court. This decision proceeded on the ground that the legislature had the power to legalize the defective proceedings of the town authorities, upon the faith of which the plaintiff had built the bridge, the benefits of which the town had received and continued to enjoy. Had it been an action against a private individual instead of against a municipal corporation, the acceptance of the work would have rendered the defendant liable even though his agent had had no authority to contract for its performance, and therefore there was resting on the town a clear, equitable obligation to pay for the bridge. But in Re Greene, 166 N. Y. 485, 60 N. E. 183, the plaintiff, the receiver of a bank, had been defeated in an action against

the county of Niagara to recover for certain overdrafts claimed to have been made by its county treasurer, and a statute was passed authorizing the supreme court to appoint a referee to rehear the plaintiff's claim. The statute was declared void, and it was held that, as the judgment in favor of the county had been on the merits, it was just as much above legislative invasion as if it had been in favor of the receiver. So in Chapman v. City of New York, 168 N. Y. 80, 61 N. E. 108, it was held that a statute requiring the city to repay a public officer the expenses incurred in successfully defending a proceeding to remove him from office was unconstitutional and void. In Bush v. Board, 159 N. Y. 212, 53 N. E. 1121, 45 L. R. A. 556, 70 Am. St. Rep. 538, it was held that, where there is no legal or moral obligation on the part of the town to pay, a statute authorizing payment is in conflict with the provision of the constitution which forbids the town from giving any money to or in aid of an individual. It would seem, therefore, that under the authorities, no less than under the express terms of the constitution, the statute before us is invalid.

The order appealed from should be affirmed, but without costs.

PARKER, C. J., and GRAY, O'BRIEN, BARTLETT, HAIGHT, and WERNER, JJ.,

concur.

Order affirmed.

(171 N. Y. 256)

In re WATSON'S ESTATE. (Court of Appeals of New York. May 20, 1902.)

TRANSFER TAX-EXEMPTIONS.

Missionary societies and Young Men's Christian Associations are not religious corporations, within Laws 1896, c. 908, and Laws 1901, c. 458, exempting such corporations from the personal tax imposed by the tax law; and where the testator died subsequent to the passage of Laws 1900, c. 382, which deprived such societies of the exemption theretofore existing under section 4 of the tax law, legacies to them are subject to the transfer tax.

Appeal from supreme court, appellate division, Fourth department.

In the matter of the appraisal of the estate of Lucinda A. Watson, deceased. From an order of the appellate division (75 N. Y. Supp. 1134) affirming orders of the Oneida county surrogate's court (73 N. Y. Supp. 1058) exempting legacies to the Young Men's Christian Association of Rome and others from a personal tax, the comptroller of the state of New York appeals. Reversed.

Charles R. Coville and Russell S. Johnson, for appellant. C. D. Prescott, for respondent Young Men's Christian Ass'n of Rome. William K. Harvey, for respondent Missionary Soc. of M. E. Church.

WERNER, J. The testatrix, a resident of the city of Rome, Oneida county, N. Y., died in that city September 18, 1900, leaving a will bearing date June 27th in the same year, and which was probated November 20th following. By her will she bequeathed $500 to the Young Men's Christian Association of the city of Rome, and $2,000 to the Missionary Society of the Methodist Episcopal Church. Upon the appraisal of the estate for the purpose of ascertaining the amount of the transfer tax upon it, the appraiser held these two legacies exempt. His decision was sustained by the surrogate. The state comptroller thereupon appealed to the appellate division, which court affirmed the order entered upon said decision. The comptroller now appeals to this court, and the sole question presented is whether the legacies to these two corporations named are exempt from the tax provided for in section 220 of the tax law (Laws 1896, c. 908). That section is a part of article 10 of the tax law, which article relates to taxes on transfers of property, and, so far as material here, provides, in substance, that a tax of 5 per cent. shall be imposed upon the transfer of any property by will, of the value of $500 or over, to persons or corporations not exempt by law from taxation.

Prior to 1896, article 10 of the tax law was a separate statute, known as the "Transfer Tax Law." In that year it was incorporated into the tax law together with other statutes relating to taxation; the legislative intent being to codify all the statutes relating to that subject into one consolidated act. After such consolidation, section 4 of the tax law provided that the real and personal property of a "corporation or association organized exclusively for the moral or mental improvement of men or women, or for religious, Bible, tract, charitable, benevolent, missionary, hospital, infirmary, educational, scientific, literary, library, * purposes," should be exempt from taxation. As the statutes then stood, it is conceded that the legacies to these two corporations would have been exempt. In 1900, by chapter 382 of the laws of that year, the tax law was amended by adding section 243 to article 10 thereof. That section reads: "The exemptions enumerated in section four of the tax law, of which this article is a part, shall not be construed as being applicable in any manner to the provisions of this act." This law went into effect before the death of the testatrix. This new section, it will be observed, had the effect of taking from these corporations the benefit of the exemptions provided by section 4; and the legacies to them are now subject to tax (In re Huntington's Estate, 168 N. Y. 399, 61 N. E. 643), unless there is some other provision of the tax law by which they are exempted. the codification of the laws relating to cor

In

porations, the legislature has divided them into classes, and enacted separate statutes governing the organization and administration of each class. Among these statutes are the religious corporations law (Laws 1895, c. 723; Gen. Laws, c. 42) and the membership corporations law (Laws 1895, c. 559; Gen. Laws, c. 43). The corporations in the case at bar must belong to one or the other of these two classes.

Section 2 of the religious corporations law defines a religious corporation to be a corporation organized for religious purposes. We are not much the wiser for this definition, but an examination of the statute shows that its provisions are devoted to the organization and government of the various denominational churches. When we turn to the membership corporations law (section 30). we find that corporations may be created under it "for any lawful purpose, except a purpose for which a corporation may be created under any other article of this chapter or any other general law than this chapter," and section 2 thereof provides that "neither the term membership corporation, nor the term membership corporation created by special law, includes a stock corporation or a corporation organized for pecuniary profit or a corporation subject to any of the provisions of the insurance law. Subject to such exceptions the term membership corporation means a corporation hereafter incorporated under this chapter or heretofore incorporated under any law repealed by this chapter, but does not include a membership corporation created by special law, and the term membership corporation created by special law means a corporation created by special law for purposes of all of which a corporation might be created under this chapter." These definitions indicate that in the enactment of the membership corporations law the legislature intended to provide for the creation of all such corporations as cannot properly be created under other provisions of the corporation law. Missionary societies and Christian associations are not specifically named as being within the definition of "membership corporations," but in sections 90 and 91 of the membership corporations law we find express provision for the organization of Young Men's Christian Associations; and in the prefatory note of the revision commissioners to said chapter, as well as in the appended schedule of laws repealed thereby, it is made perfectly plain that all previous general laws relating to the creation of missionary societies and Christian associations are supplanted by it. It is true that both of the corporations at bar were cre ated for purposes so closely allied to religion that they may be broadly classed as religious corporations. The objects of the Young Men's Christian Association are stated to be "the improvement of the spiritual, mental, social, and physicial condition of young men," while those of the missionary society are de

clared to be "charitable and religious, designed to diffuse more generally the blessings of education and Christianity, and to promote and support missionary schools and Christian missions throughout the United States and territories, and also in foreign countries." But it is also apparent that the legislature, in speaking of religious corporations, has never intended to include, within that term any of the numerous benevolent, charitable, philanthropic, and missionary organizatious created either under special laws or under the general statutes repealed by the membership corporations law. The history of legislation relating to religious corporations, beginning with the first statute (chapter 18, Laws 1784), and running through all the laws upon that subject, which finally culminated in the religious corporations law (chapter 42, Gen, Laws), clearly shows that it has always been the legislative policy to draw a distinct line between religious corporations and such auxiliary organizations as missionary societies. The latter were incorporated and governed under special laws until 1848, in which year the general act (chapter 319) was passed for the incorporation of charitable, scientific, and missionary societies. The classification above referred to has been maintained in all of the statutes which have succeeded the act of 1848. In addition to all this, a study of the statutes of this state relating to taxation and exemptions reveals the fact that organizations for the mental and moral improvement of men and women, as well as missionary societies, have always been referred to in juxtaposition with religious corporations, thus clearly indicating that the latter designation was not designed to include either of the former. This is fairly illustrated by subdivision 7, § 4, of the tax law, which exempts from taxation the real and personal property "of a corporation or association organized exclusively for the moral or mental improvement of men or women, or for religious, Bible, tract, charitable, benevolent, missionary purposes." If the term "religious corporation" had been intended by the legislature to embrace missionary societies or associations for the mental and moral improvement of men and women, there would have been no necessity for naming them separately and specifically in the same context,-much less, for a distinct statute entitled the "Religious Corporations Law," which deals exclusively with church organizations as distinguished from the class of corporations to which those at bar belong. This view is re-enforced by the provisions of section 221 of the tax law as amended by chapter 458, Laws 1901. That section in express terms exempts the property of religious corporations from the operation of the transfer tax law. But the same section exempts only personal property other than mone or securities bequeathed to a corporation organized exclusively for the moral or mental improvement of men or wo

men and for missionary purposes. Had the legislature regarded missionary societies and Christian associations as religious corporations, there would have been no occasion for the special exemption which is limited to personal property "other than money or securities" in the case of such societies and associations. The legislative policy upon this subject, therefore, seems to be clearly defined; and it is our plain duty to obey the legislative command, although in doing so we cannot refrain from expressing our regret that the exemptions in our tax laws are not laid upon deeper and broader foundations. The spirit of philanthropy and charity will not be fostered or strengthened, nor the state enriched, by a system of laws which permit an opulent sectarian church to gather into its coffers, tax free, the legacies of its donors, while the great humanitarian and practical charities of the age must first yield tribute to the state before they can take that which is given them to do their good works. It would almost seem as if the restoration of the ancient law of charitable uses by chapter 701, Laws 1893 (Allen v. Stevens, 161 N. Y. 122, 55 N. E. 568), had been overlooked in the subsequent codification of the statutes relating to taxable transfers, and it is to be hoped that the inequities and inconsistencies of the latter may soon give way to a more liberal and just rule.

The orders of the appellate division and the surrogate should be reversed, with costs, and the proceedings remitted to the surrogate's court with directions to proceed there

On the 31st of May, 1894, the defendant, a domestic insurance corporation doing an ordinary life insurance business, issued a policy on the life of Emanuel Bourbon, whereby it promised to pay to Blanche Bourbon, his wife, the sum of $5,000 on the 24th of May, 1899, or on his death, if he died before that date. On the 31st of August, 1899, after the policy had become due and was payable, but before it had been paid, the plaintiff Amberg caused a levy to be made upon the sum of money due to Mrs. Bourbon thereon under an attachment issued in an action commenced by him against her in the supreme court of this state. January 5, 1900, judgment was rendered in said action by default (the summons having been served by publication) in favor of the plaintiff and against the defendant therein for the sum of $23,772.24. Execution having been issued upon said judgment and returned unsatisfied, this action was commenced, by leave of said court, against the defendant herein by said judgment creditor, and the sheriff who levied the attachment, to recover the amount due upon the policy. The defendant answered, and, after admitting certain portions of the complaint, pleaded a general denial only. Upon the trial the facts alleged in the complaint were proved without contradiction, and the defendant moved to dismiss the complaint upon the ground that "neither the policy in question nor its proceeds are subject to the attachment in evidence in the case, nor to an execution, nor can the policy or its proceeds, under the statutes and laws, be reached by a creditor of the wife"; that neither the policy nor the proceeds thereof are property, according to law; and that judgment for the plaintiffs would be no protection to the defendant against an action by Mrs. Bourbon for the sum due upon the policy. The motion was denied, and the defendant excepted. Neither party asked to go to the jury, and, under the direction of the court, a verdict was rendered in favor of the plaintiffs for the amount due on the policy and interest. The judgment entered accordingly was reversed upon appeal to the appellate division, and the plaintiffs appealed to this court.

Herbert H. Maass and Alexander Blumenstiel, for appellants. Edward S. Rapallo, for respondent.

VANN, J. (after stating the facts). The question presented by this appeal is whether the money due upon a matured insurance policy written by an ordinary life insurance company upon the life of a husband, payable to his wife, is subject to levy under a warrant of attachment issued against the property of the wife in an action brought to recover a debt owing by her. This question has never been passed upon by the court of appeals. While we have held that such a policy cannot be seized by the creditors either of the husband or the wife before it has become due

The

and payable, we have not held that it is exempt from the claims of her creditors after the contingent promise has ripened into an actual promise, and the right of the beneficiary has become absolute. There has never been a statute expressly exempting a policy issued by a regular life insurance corporation from the demands of the wife's creditors, al though there have been statutes of that kind which applied to the policies or certificates issued by co-operative insurance societies. reason for holding that the policy is practically exempt until it becomes due is that the wife could not assign it until it matured, because "it would be against the spirit and policy of the statute to allow such a policy to be assigned by a wife during the lifetime of her husband," or before the maturity of the policy. Eadie v. Slimmon, 26 N. Y. 9, 82 Am. Dec. 395; Barry v. Society, 59 N. Y. 587; Brummer v. Cohn, 86 N. Y. 11, 40 Am. Rep. 503; Smillie v. Quinn, 90 N. Y. 492; Baron v. Brummer, 100 N. Y. 372, 3 N. E. 474; Frank v. Insurance Co., 102 N. Y. 266, 7 N. E. 828, 55 Am. Rep. 837; Brick v. Campbell, 122 N. Y. 337, 25 N. E. 493, 10 L. R. A. 259. Referring to said statute, which is hereinafter set forth, the court said in Barry v. Society, supra: "Without that act, when this policy was issued the insurance money, being for premiums paid out of the funds or property of the husband, could not have been retained from the personal representatives or creditors. That act sought that result, not for the sake of the woman while a wife, but when a widow; not that she might sell or assign the contingency which was created by the policy, but that it should be kept for her until, by the death of her husband, she surviving, it became realized personal property." Hence the courts have refused to compel the wife to do that which she could not do of her own volition. The reason for thus giving practical exemption to the policy before the insurance became due has no application to a policy after it has become due, for she can then assign it, as she can any other cause of action. As the reason for the rule ceases to exist as soon as the policy matures and becomes assignable, should the rule, made by the courts, and not by the legislature, be extended to a policy after it has matured? This is the precise question before us.

Courts have no power to declare property exempt from the claims of creditors, unless there is some statute which, either expressly or by reasonable implication, requires it. The general rule is that all property is subject to levy and sale upon execution, and every exception must be founded upon a statute, for the subject is within the control of the legislature, not of the courts. The earliest statute upon the subject was entitled, "An act in respect to insurances for lives for the benefit of married women," which provided that "it shall be lawful for any married woman, by herself, and in her name, or in the name of any third person, with his

assent, as her trustee, to cause to be insured, for her sole use, the life of her husband for any definite period, or for the term of his natural life; and in case of her surviving her husband, the sum or net amount of the insurance becoming due and payable, by the terms of the insurance, shall be payable to her, to and for her own use, free from claims of the representatives of her husband, or any of his creditors; but such exemption shall not apply where the amount of premium annually paid shall exceed three hundred dollars." Laws 1840, c. 80, § 1. When this statute was enacted, married women were still under the common-law disability to enter into contracts; but by subsequent legislation that disability has gradually been removed, until at last a wife is enabled to contract with the freedom of a feme sole. Laws 1896, c. 272, § 21. The act of 1840 was amended several times in particulars not now important, for all the amendments left the section above quoted substantially unchanged. Laws 1858, c. 187; Laws 1866, c. 656; Laws 1870, c. 277; Laws 1873, c. 821; Laws 1879, c. 248. All of these statutes, including the original act, were repealed by the domestic relations law, which made the following provision upon the subject: "A married woman may, in her own name, or in the name of a third person, with his consent, as her trustee, cause the life of her husband to be insured for a definite period, or for the term of his natural life. Where a married woman survives such peFiod or term she is entitled to receive the insurance money, payable by the terms of the policy, as her separate property, and free from any claim of a creditor or representative of her husband, except, that where the premium actually paid annually out of the husband's property exceeds five hundred dollars, that portion of the insurance money which is purchased by excess of premium above five hundred dollars, is primarily liable for the husband's debts.

* A policy

of insurance on the life of any person for the benefit of a married woman, is also assignable and may be surrendered to the company issuing the same, by her, or her legal representative, with the written consent of the assured." Laws 1896, c. 272, § 22. While the earlier statute provided that the policy should be for the "sole use" of the wife, and that the insurance money should "be payable to" her, "to and for her own use," free from claim by her husband's creditors, the language of the later act is that "she is entitled to receive the insurance money * her separate property." This is the only act which now, even by implication, can be claimed to exempt a policy or its proceeds from the claims of the wife's creditors. If the words "payable to her, to and for her own use," as used in the act of 1840, authorized an exemption by implication, the language of the act now in force lends no support to such a construction, for they simply entitle the wife to receive the money as her separate

as

property. This means that she owns it, as she owns any other property belonging to her separate estate. The insurance law provides that "all money or other benefit, charity, relief or aid, to be paid" by co-operative societies, "shall be exempt from execution," both as to members and beneficiaries, but this language does not exempt the money after it has been paid over. Bull v. Case, 165 N. Y. 578, 59 N. E. 301. The words of the insurance law impress us as much stronger than those used in the domestic relations law.

The statutes relating to the exemption of policies issued by co-operative insurance companies on the life of a husband for the benefit of his wife were quite different in form and substance from the act of 1840, for some of them expressly exempted not only the pol icy, but the proceeds thereof after they were paid over to the wife, from the claims of her creditors. Laws 1883, c. 175; Laws 1884, c. 116; Laws 1889, c. 520; Laws 1892, c. 690, § 238. The policy of the legislature, however, even with reference to co-operative insurance contracts, has been so changed by the insurance law, that, as we have recently held, the proceeds of such a policy after they have actually been paid over to the beneficiary are not exempt, but are subject to levy under an attachment against property. Bull v. Case, 41 App. Div. 391, 58 N. Y. Supp. 774; Id., 165 N. Y. 578, 59 N. E. 301. In deciding that case we said: "Just as any money or property which is left by a decedent may be taken for the debts or liabilities of those to whom it is given after it has been paid to them, so the proceeds of an insurance policy or certificate may be compulsorily devoted to the same purpose when the beneficiary comes into possession thereof.

It is obvious that no principle of public policy can justify unlimited exemptions of such moneys, and nothing but the explicit and unqualified fiat of the legislature would warrant the courts in going to that extent." Judge Cullen did not sit in this court upon the argument of that case, because he sat below, but his vigorous opinion when he wrote for the appellate division shows that his views are the same as those expressed by us. The language quoted applies with greater force to policies issued by regular insurance companies, for there has never been any statute which expressly exempted their policies, or the proceeds thereof, from the payment of debts contracted by the wife. Therefore, if the money due upon the policy now under consideration had actually been paid over to the beneficiary, it would not have been exempt. Was it exempt when it was in the possession of the insurance company, ready to be paid over to her? Although not exempt if it reached her hands, was it exempt five minutes before, when it was in the hands of the company, and about to be paid to her to discharge a debt which the company owed her? Upon this question I cannot express my views more clearly than