Creasey v. Zink. In Re Creasey's Estate.

• Decision Date: 12 June 1947
• Docket Number: No. 7793.,7793.
• Citation: 53 A.2d 715
• Parties: CREASEY v. ZINK. In re CREASEY'S ESTATE.
• Court: New Jersey Prerogative Court

53 A.2d 715

CREASEY

v. ZINK.In re CREASEY'S ESTATE.

No. 7793.

Prerogative Court of New Jersey.

June 12, 1947.

Proceeding by Nettie E. Creasey, executrix of the last will of William W. Creasey, deceased, agaisnt Homer C. Zink, Commissioner, Department of Taxation and Finance, involving the transfer inheritance tax due from the estate. From an adverse determination, the executrix appeals.

Affirmed.

Syllabus by the Court

1. When a decision upon a point of law has been made upon solemn argument, and upon mature deliberation, the community have a right to regard it as a just declaration or exposition of the law, and to regulate their actions by it. When a rule has once been deliberately adopted and declared, it ought never to be disturbed by the same court, except for very urgent reasons and upon a clear manifestation of error.

2. It is firmly established by our local decisions that the interpretation and applicability of our transfer inheritance tax statute reposes primarily in the courts of this state and that the decisions of foreign jurisdictions are not to be accorded the leverage of predominant and obligatory edicts.

3. Where a partnership agreement provided, inter alia, that in the event of the death of any partner prior to the terminal date of the partnership, it shall continue until the end of the calendar year in which the death occurs, and the decedent's estate shall receive all payments by way of interest on capital or shares of profits which the deceased partner would have been entitled to receive had he lived,- Held, that the one-third share of the profits derived from the partnership operations during the interval between decedent's death and the end of the calendar year (duly discounted to reflect the value as of the date of death since the share was not receivable until a date subsequent to decedent's death) was properly includable in decedent's gross estate in determining the transfer inheritance tax.

Milton Lowenstein, of Newark, for appellant.

Walter D. Van Riper, Atty. Gen. (William A. Moore, Sp. Asst. Atty. Gen., of counsel), for respondent.

JAYNE, Vice-Ordinary.

The subject to which the present appeal relates can be succinctly revealed. One William W. Creasey, a resident of East Orange, Essex County, New Jersey, died testate on March 28, 1946. He was a member of a patnership known as Robert C. King & Company, constituting as sales agency for manufacturers of knit wear and sports wear. The duration of the partnership was to terminate on December 31, 1946.

The agreement among the three partners dated November 22, 1943, pursuant to which the association operated, embraced the following articles of particular significance and pertinency:

‘Thirteenth: In the event of the death of any one of the partners, limited or general, prior to December 31, 1946, it is agreed that the partnership shall continue until the end of the calendar year in which such death occurs and then terminate. During such period the estate of the deceased partner shall receive all payments by way of interest on capital or shares of profits which the deceased partner would have been entitled to receive had he lived, and in like manner shall bear the deceased partner's proportion of losses, if any. However, the salary payable to any partner shall cease from the date of his death. The personal representatives of a deceased partner shall have no right to take part in the management of the business.

‘Fourteenth: In arriving at the value of the interest of any retiring or deceased partner, no value shall be placed on good will nor shall it be regarded as property or as an asset of the partnership, and there shall be no charge against the remaining partner or partners for the good will or firm name of the business.’

The one-third share of the profits derived from the partnership operations during the interval between the decedent's death and the end of the calendar year amounted to $36,363.85. Since the share of those profits was not receivable until a date subsequent to the death of the decedent, the tax bureau discounted the amount to reflect the value as of the date of death. Such value was determined to be $35,049.49 and has been subjected to transfer inheritance taxation as an asset of the decedent's estate within the purview of R.S. 54:34-1, subd. a, N.J.S.A. 54:34-1, subd. a. The executrix of the decedent's estate protests.

I may pause to state that the taxing authorities have accepted the valuations reported by the appellant including her calculation of the decedent's share of the partnership profits. Therefore the appraisals are not in the field of controversy.

The point at issue is whether or not the contractual interest held by the decedent in the profits to accrue after his death is a taxable assets of his estate.

In moving towards the solution of that question I face an [heretofore] unreported opinion rendered and filed in this court on October 27, 1932, by my predecessor, Vice Ordinary Buchanan, in a cause entitled In re Estate of Williams (Williams v. Bugbee), 53 A.2d 719. It appears to be decisive of the question projected by the present appeal. It is accordingly an authoritative precedent (a full copy of which I shall append to this memorandum with the intention that it shall accompany mine in the event of an appeal).

I am importuned by counsel for the appellant either to differentiate the Williams case or to express a discordant conclusion. Although it has been said that a precedent embalms a principle, and although I do not assent to the proposition that our courts must abjectly submit to an unqualified enslavement and subserviency to early precedents, yet it would be disastrous frequently to have one law on the same subject in the morning and another at night. In Carroll v. Local No. 269, &c., Electrical Workers, 133 N.J.Eq. 144, 31 A.2d 223, 225, I professed that: ‘It is the peculiar genius and strength of the common law that no decision is stare decisis when it has lost its usefulness in our social evolution; it is distinguished, and if times have sufficiently changed, overruled. Judicial opinions do not always preserve the social statics of another generation.’

However, one should not be incorrigible in the performance of judicial service. There are certain commandments in the law which must be heeded and respected. Among them is that proclaimed by Chancellor Kent: ‘When a decision upon a point of law has been made upon solemn argument, and upon mature deliberation, the community have a right to regard it as a just declaration or exposition of the law, and to regulate their actions by it. When a rule has once been deliberately adopted and declared, it ought never to be disturbed by the same court, except for very urgent reasons and upon a clear manifestation of error.’ (Italics mine.) 1 Kent Com. 475.

Despite man's modern propensity for innovations, that rule of judicial action has continued to retain its prestige. Bowman v. Freeholders of Essex, 73 N.J.L. 543, 64 A. 1010; Freeholders v. Jersey City, &c., St. Ry. Co., 85 N.J.L. 179, 88 A. 1061; McFadden v. Palmer, 83...