Beers v. Edwards

• Decision Date: 24 February 1913
• Citation: 84 N.J.L. 32,85 A. 1022
• Parties: BEERS et al. v. EDWARDS, STATE COMPTROLLER.
• Court: New Jersey Supreme Court

85 A. 1022

84 N.J.L. 32

BEERS et al.

v. EDWARDS, STATE COMPTROLLER.

Supreme Court of New Jersey.

Feb. 24, 1913.

(Syllabus by the Court.)

Certiorari by Luciua H. Beers and Henry De Forest Baldwin, executors, against Edward I. Edwards, State Comptroller, to review a transfer tax assessment Assessment corrected.

Argued November term, 1912, before SWAYZE, VOORIIEES, and KALISCH, JJ.

Stephen H. Little, of Morristown (Herbert C. Lakin, of New York City, on the brief), for prosecutors.

Theodore Backes, of Trenton, and Edmund Wilson, Atty. Gen., for the State.

SWAYZE, J. The only question raised in this case is the proper construction of section 12 of the Transfer Tax Act of 1909 (P. L. 1909, p. 332). The decedent was a resident of New York. A large part of his property was real estate in that state. In fixing the tax on the transfer of stocks In New Jersey corporations, the Comptroller computed the entire tax of the estate upon an amount which included the value of the New York real estate. To this inclusion of the New York real estate the prosecutors object. The language of the statute with which we are concerned is: "Such property located within this state shall be subject to a tax, which said tax shall bear the same ratio to the entire tax which the said estate of such decedent would have been subject to under this act if such nonresident decedent had been a resident of this state, as such property located in this state bears to the entire estate of such nonresident decedent wherever situated." Stated more narrowly, the case turns on the meaning of the clause "the entire tax which the said estate of such decedent would have been subject to under the act if such nonresident decedent had been a resident of this state." When the exact question is thus stated, we think the difficulty in answering it disappears. If the decedent had been a resident of this state, no tax could have been imposed on real estate situated in New York, since that portion of his property was beyond the jurisdiction of New Jersey, and to tax it would violate the rights secured by the fourteenth amendment to the federal Constitution. It suffices to cite Louisville, etc., Ferry Co. v. Kentucky, 188 U. S. 385, 23 Sup. Ct. 463, 47 L. Ed. 513, and Union Transit Co. v. Kentucky, 199 U. S. 194, 26 Sup. Ct. 36, 50 L. Ed. 150, 4 Ann. Cas. 493, as to the general principle, and In re Swift's Estate, 137 N. Y. 77, 32 N. E. 1096, 18 L. R. A. 709, and Connell v. Crosby, 210 Ill. 380, 71 N. E. 350, as to the applicability of the principle to inheritance taxes. The result follows logically from the legal theory upon which inheritance taxes are justified that the rights of testamentary disposition and of succession are creatures of law upon the...