Maxwell v. Edwards

Citation89 N.J.Law 446,99 A. 138
PartiesMAXWELL et al. v. EDWARDS, State Comptroller of the Treasury, et al.
Decision Date29 November 1916
CourtUnited States State Supreme Court (New Jersey)

Certiorari by Lawrence Maxwell and others, executors, etc., against Edward I. Edwards, Comptroller of the Treasury of the state of New Jersey, and others, to review an assessment of a transfer tax. Tax affirmed.

Argued June term, 1916, before SWAYZE, MINTURN, and KALISCH, JJ.

Coult & Smith, of Newark, and Edward De Witt, of New York City, for prosecutors. John W. Wescott, Atty. Gen., and John R. Hardin, of Newark, for the State.

MINTURN, J. The writ is intended to review an assessment of a transfer tax, imposed by the state comptroller, upon certain personalty in this state, of which James McDonald, a nonresident, died possessed. The property in question consists of certain stocks in the Standard Oil Company and in six other New Jersey corporations, valued in the aggregate at $1,114,965. The deceased died in the District of Columbia, leaving a last will and testament, and a codicil, which were duly admitted to probate, and letters testamentary granted thereon in that District to Lawrence Maxwell, of Ohio, and the Fulton Trust Company, of New York, a corporation organized under the laws of that state, who have qualified as executors. The beneficiaries named in the will were at the time of testator's death nonresidents of this state. The total amount of the state tax imposed was $29,071.68, the legality of which assessment is the subject of this litigation.

The tax was imposed in pursuance of chapter 228 of the Laws of 1909, as amended by chapter 151 of the Laws of 1914. A subsequent amendment was passed in 1915 (P. L. 1915, p. 745), but was not effective or in operation at the time of the death of the testator, and therefore has no bearing upon this issue. The act of 1909 was the original act dealing with the subject-matter of this contest, and presents in its title a clear statement of the legislative intent:

"An act to tax the transfer of property of resident and nonresident decedents, by devise, bequest, descent, distribution by statute, gift, deed, grant, bargain and sale in certain cases."

It is insisted that in imposing the tax the decisions of the New York courts, construing a statute substantially similar in verbiage to the act in question, should have been followed by the comptroller. This contention, however, has been dealt with by this court in Hopper v. Edwards, 88 N. J. Law, 471, 96 Atl. 667, in an opinion by Mr. Justice Trenchard, and quite recently in Torrance v. Edwards, 99 Atl. 136, in an opinion by Mr. Justice Kalisch; both adjudications being adverse to the claim urged here. That question, therefore, may be disposed of upon the doctrine of stare decisis.

The effect of the legislation under consideration has been determined by this court, and the Court of Errors, in a series of cases in which its legality was attacked from various aspects, with the result of sustaining it as a legislative effort to impose a succession as contradistinguished from a property tax. It is further deducible from these decisions that this legislative power, when not exerted in an arbitrary or capricious manner, or in disregard of fundamental rights, does not contravene any inhibition intended to secure equality of right, contained in the provisions of the federal or state Constitutions. Neilson v. Russell, 76 N. J. Law, 27, 69 Atl. 476, in Court of Errors, 76 N. J. Law, 655, 71 Atl. 286, 19 L. R. A. (N. S.) 887, 131 Am. St. Rep. 673; Sawter v. Shoenthal, 83 N. J. Law, 499, 83 Atl. 1004; Carr v. Edwards, 84 N. J. Law, 667, 87 Atl. 132; Beers v. Edwards, 84 N. J. Law, 32, 85 Atl. 1022; Senff v. Edwards, 85 N. J. Law, 67, 88 Atl. 1026; Hopper v. Edwards, 88 N. J. Law, 471, 96 Atl. 667; Howell v. Edwards, 88 N. J. Law, 134, 96 Atl. 186.

The inquiry presented by this controversy is not any criticism of these fundamentals but resolves itself entirely into a criticism of the legal effect of the amendment of 1914, in its effort to reach the estates of nonresident decedents, by the method provided in section 12 of the act, which is as follows:

"A tax shall be assessed on the transfer of property * * * in this state of a nonresident decedent if all or any part of the estate of such decedent, wherever situated, shall pass to persons or corporations taxable under this act, which tax shall bear the same ratio to the entire tax which the said estate would have been subject to under this act if such nonresident decedent had been a resident of this state, and all his property, real and personal, had been located within this state, as such * * * property within this state bears to the entire estate, wherever situated: Provided that nothing in this clause contained shall apply to any specific bequest or devise of any property in this state."

The clear intent of this legislation, it has been determined, is to provide a mathematical formula to the estate of a nonresident decedent, which in practical application will work out a tax, not on the entire estate of the decedent, but upon that portion of it within the Jurisdiction, so as to practically equalize in administration the tax imposed by the same legislation upon the estates of resident decedents. That this object may be adequately and legally attained by this legislative method is evidenced by the authorities.

The method in question doubtless had its origin in an intimation contained in the opinion of Mr. Justice Swayze, in Beers v. Edwards, supra, in commenting upon the act of 1909, wherein he declared:

"We do not mean to say that the Legislature might not have adopted another basis for the computation of the entire tax; it might perhaps...

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  • Lichtenstein's Estate, In re
    • United States
    • New Jersey Supreme Court
    • November 4, 1968
    ...Howell v. Edwards, 88 N.J.L. 134, 96 A. 186 (Sup.Ct.1915), affirmed o.b. 89 N.J.L. 713, 99 A. 1070 (E. & A. 1916); Maxwell v. Edwards, 89 N.J.L. 446, 99 A. 138 (Sup.Ct.1916), affirmed 90 N.J.L. 707, 101 A. 248 (E. & A. 1917), affirmed sub nom. Maxwell v. Bugbee, 250 U.S. 525, 40 S.Ct. 2, 63......

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