Coffin v. Kelly

• Decision Date: 21 February 1944
• Docket Number: No. 207.,207.
• Citation: 131 N.J.L. 241,36 A.2d 11
• Parties: COFFIN v. KELLY, State Tax Com'r.
• Court: New Jersey Supreme Court

131 N.J.L. 241

36 A.2d 11

COFFIN

v.KELLY, State Tax Com'r.

No. 207.

Supreme Court of New Jersey.

Feb. 21, 1944.

Proceeding in the matter of the transfer inheritance tax of the estate of Harriet D. Coffin, deceased. To review a decree of the Prerogative Court, 133 N.J.Eq. 188, 31 A.2d 186, affirming an assessment by William D. Kelly, state tax commissioner, C. W. Floyd Coffin, sole surviving executor of the last will of Harriet D. Coffin, deceased, brings certiorari.

Affirmed.

October term, 1943, before BROGAN, C. J., and BODINE and COLIE, JJ.

Morrison, Lloyd & Morrison, Wm. J. Morrison, Jr., and Francis ,V. D. Lloyd, all of Ridgefield Park (M. S. Hottenstein and Jacob Mertens, Jr., both of New York City, of counsel), for petitioner-prosecutor.

David T. Wilentz, Atty. Gen. of New Jersey (William A. Moore, of Trenton, of counsel), for respondent-defendant.

BROGAN, Chief Justice.

In December, 1935, Mrs. Harriet D. Coffin transferred personal property amounting to $734,488, which was practically her entire estate. There was transferred to her grandchildren by two deeds of trust the sum of $659,488; the balance to her two sons and some near relatives. Four years later she died, testate; her estate then amounted to $14,500. The State Tax Commissioner, after the death of the donor, imposed inheritance taxes on these transfers. On appeal to the Prerogative Court Vice-Ordinary Jayne affirmed the assessment of taxes (Coffin v. Kelly, 133 N.J.Eq. 188, 31 A.2d 186). Her will had been executed more than twelve years previously to the transfer, that is, in January, 1923. By this instrument her estate was left to her husband and in the event that he had predeceased testatrix (which was the case) then to her two sons equally. A codicil was executed in December, 1938, which left unchanged the previous plan of distribution. At the time the transfers were made Mrs. Coffin's husband, Joel C. Coffin, had been dead for approximately nine months.

The pertinent statute, R.S. 54:34-1, subd. c, N.J.S.A., ordains that a tax, according to statutory schedule, shall be imposed upon the transfer of property of the value of $500 or over, or of any interest therein or income therefrom in trust or otherwise to or for the use of any transferee, distributee or beneficiary when the transfer is made in contemplation of the death of the grantor, vendor or donor or intended to take effect in possession or enjoyment at or after such death. It is further provided that if a transfer be made without adequate valuable consideration and within two years prior to the death of the grantor, vendor or donor of a material part of his estate or in the nature of a final disposition and distribution thereof, of, it shall, in the absence of proof to the contrary, be deemed to have been made in contemplation of death within the meaning of the statute. This presumption, however, may be overcome by proof to the contrary. To determine the question in the case-whether the taxes were lawfully imposed on these transfers-the intention of the donor and her underlying motive must be ascertained. Intention is always an issue of fact and necessarily must be arrived at from all the facts, circumstances and conditions that obtained at the time of the transfers. And this is a matter that in many cases is not without its perplexities.

The executors prosecute this writ and resist the tax urging that under the facts, circumstances and conditions of this case the transfers were gifts inter vivos, not made in contemplation of death or...