Folsom v. Martin

• Decision Date: 12 May 1941
• Docket Number: No. 223.,223.
• Citation: 20 A.2d 8,126 N.J.L. 472
• Parties: FOLSOM v. MARTIN, State Tax Com'r.
• Court: New Jersey Supreme Court

20 A.2d 8

126 N.J.L. 472

FOLSOM

v. MARTIN, State Tax Com'r.

No. 223.

Supreme Court of New Jersey.

May 12, 1941.

Proceeding in the matter of the assessment by J. H. Thayer Martin, State Tax Commissioner, of the transfer inheritance tax due with respect to the estate of Henry T. Folsom, deceased. To review a decree affirming the decision of the Commissioner, Henry Lloyd Folsom, executor of the last will and testament of Henry T. Folsom, brings certiorari.

Affirmed.

On rule to show cause why writ of certiorari should not issue to review a decree in the Prerogative Court advised by Vice Ordinary Buchanan who filed the following opinion:

Henry T. Folsom died, testate, February 26, 1937, aged 77 years, resident of this state, leaving a gross estate of $26,517.57. The liability to transfer inheritance tax in respect thereto is not in dispute. The Commissioner however added to the "taxable estate" the sum of $108,747.15, the aggregate value of 1065 shares of stock transferred by decedent to his son on March 31, 1932. The decedent was then aged 72, and this was approximately five years before his death.

The Commissioner found that this transfer was made in contemplation of death; and assessed tax in respect thereof. The correctness of this finding is the sole issue on the appeal.

The burden is upon the appellant to establish that the finding as to this gift was erroneous,—not supported or justified by the facts. In re Dupignac's Estate, 96 N. J.Eq. 284, 125 A. 119; In re Hall's Estate, 94 N.J.Eq. 398, 119 A. 669. Consideration of the evidence leads to the conclusion that in this the appellant has not succeeded; and that the Commissioner's finding was correct.

It appears from the proofs that decedent's father in 1888 incorporated the H. & D. Folsom Arms Company, a sporting goods business, all of the stock of which was held by members of the Folsom family; that upon the father's death (prior to the birth of any grandchildren) he left 1065 shares (of a total issue of 2145) to his wife (decedent's mother), expressing the wish that she in turn leave the stock to decedent and his sister; that the latter predeceased the mother; that the mother, decedent and his son (the present appellant) lived together until the son's marriage; that decedent served as president and secretary and the son as vice-president of the company,—each receiving a like remuneration; that decedent's mother told him and the son that she did not feel right about leaving the whole 1065 shares to decedent,—that she believed that, had her husband (the grandfather) known the grandson, he would have provided for a different disposition of these shares,—at least as to the portion he had asked her to transfer by will to his daughter; that she made no change in her will because the grandson requested her not to do so; that upon her death in September, 1929, the 1065 shares were bequeathed to decedent; and that two and a half years later, on March 31, 1932, decedent transferred these shares to his son, retaining 54 additional shares that he owned.

It was, and is, appellant's contention that this transfer was not made in any contemplation of death; that the sole impelling motive therefor was decedent's desire to effectuate the express wish of his deceased mother.

It is urged that decedent, despite his 72 years, was in good health at the time of the transfer, and that, until two years before his death (three years after the transfer was made), he had no cause for a contemplation of the actual imminence or probability of death in the not distant future, and that there is nothing to show that he had any such contemplation.

The proofs show, however, that on March 31, 1932, the decedent felt ill, and complained of a feeling of numbness in two of his fingers; that Dr. Harvey, the family physician, being summoned, made on that day a thorough examination which disclosed the fact that decedent's heart was irregular; that the doctor thought it necessary "under the circumstances and because of his age" to have decedent remain in bed so that he could obtain complete rest and quiet; that, while the doctor did not consider his condition serious, and while all traces of the attack disappeared in about two weeks, decedent's heart continued to be irregular; that after a month's confinement decedent resumed his business activities and continued to take short fishing and hunting trips; and that in 1935 decedent's mental and physical condition began noticeably to deteriorate.

The transfer in question was made on the same day on which this heart attack took place.

In and by the death certificate, Dr. Harvey certifies that he attended decedent from February, 1932, until his death on February 26, 1937; that the causes of death were myocarditis and cerebral arteriosclerosis. While merely the year "1932" is given as the date of onset of these causes, it would seem that the actual date of the onset was on or prior to March 31, 1932 (the date of the transfer) inasmuch as after recovering from the attack suffered on that day, decedent had no cause for again summoning the physician in that year. Dr. Harvey's certification that he attended decedent in February, 1932, and his testimony that (although he had never prior to March 31, 1932, had occasion to examine decedent for a heart condition), "it is entirely possible that his heart may have been irregular prior to March 31, 1932," is of significance in this regard,—as is also the son's testimony that decedent "began a number of years ago not feeling so well but he kept on going to the office just the same."

In view of all the evidence, the conclusion is inescapable that by reason of his "slight stroke," his age and condition, decedent must certainly have contemplated and considered,—at the time he made the transfer,—the approach of death as being, while perhaps not a matter of imminence or necessarily in the definitely near future, nevertheless not a matter of vague and distant future; as being an end which must inevitably come, and which there was reasonable cause to believe might occur in the not distant future,—and in respect of which it would be reasonable and prudent to make provision.

By his will, executed on April 1, 1932 (the day following the transfer sub judice), decedent, after providing for the payment of his just debts as soon after his decease as convenient, gave, devised, and bequeathed all the residue and remainder of his estate to his son and appointed him executor thereof.

The will was of course necessarily made in contemplation of the testamentary final disposition and distribution of his estate at his death; and it appears from the proofs that some time prior to the execution thereof, decedent, after frequently speaking of rewriting his will, had destroyed a prior will and had instructed the drafting of a new will. The fact that the day prior to the execution thereof, decedent, then 72 years of age and ill from the effects of a "slight...