Howell v. Edwards

• Decision Date: 16 December 1915
• Citation: 88 N.J.Law 134,96 A. 186
• Parties: HOWELL v. EDWARDS, Comptroller, et al.
• Court: New Jersey Supreme Court

96 A. 186

88 N.J.Law 134

HOWELL

v. EDWARDS, Comptroller, et al.

Supreme Court of New Jersey.

Dec. 16, 1915.

Certiorari by Elizabeth L. Howell, as executrix of Sidney K. Laninger, deceased, against Edward I. Edwards, Comptroller, and others, to review an assessment for taxes under the transfer acts of 1909 and 1914. Assessment affirmed.

Argued June term, 1915, before PARKER, MINTURN, and KALISCH, JJ.

Henry C. Hunt, of Newark, for prosecutor. John W. Wescott, Atty. Gen., and Herbert Boggs, Asst. Atty. Gen., for respondents.

KALISCH, J. A transfer tax of $2,120.72 was assessed and levied against the estate of Sidney K. Laninger, deceased, transferred by her last will to the prosecutrix, sole devisee and beneficiary under the will and a daughter of the decedent. The prosecutrix challenges the constitutionality of the acts of 1909 and 1914 under which the transfer tax was levied. Indirectly the constitutionality of the act of 1894 is also attacked.

The act of 1894 is entitled "An act to tax intestates' estates, gifts, legacies, devises and collateral inheritance in certain cases." P. L. 1894, p. 318. The constitutionality of this act was considered in Neilson v. Russell, 76 N. J. Law, 27, 69 Atl. 476, and in Eastwood v. Russell, 81 N. J. Law, 672, 81 Atl. 108 (Court of Errors and Appeals), and held to be constitutional. Although Neilson v. Russell was reversed by the Court of Errors and Appeals, it was on a point which left the fundamental question as to the constitutionality of the act, decided by the Supreme Court, unimpaired.

The objections made by the prosecutrix against the constitutionality of the acts of 1909 and 1914 are in all respects the same, with the exception of the one which involves a consideration of the Fourteenth Amendment to the Constitution of the United States, as were leveled against the constitutionality of the act of 1894, and which were decided against the prosecutors' contentions in the cases above referred to. The act of 1909 is entitled an "Act to tax the transfer of property, of resident and non-resident decedents, by devise, bequest, descent, distribution by statute, gift, deed, grant, bargain and sale, in certain cases." P. L. 1909, p. 325. The act of 1914 is entitled "An act to amend an act entitled 'An act to tax the transfer of property, of resident and non-resident decedents, by devise, bequest, descent, distribution by statute, gift, deed, grant, bargain and sale, in certain cases, approved April 20, 1909." P. L. 1914, p. 267.

The basic principle on which the act of 1894 was held to be constitutional is preserved intact in the acts of 1909 and 1914, which latter acts are now challenged by the prosecutor on the ground that they are violative of paragraph 12, § 7, art. 4, of the Constitution, which declares that "property shall be assessed for taxes under general laws, and by uniform rules, according to its true value." But this question is no longer open to discussion, since the declaration of the Court of Errors and Appeals on this topic in Eastwood v. Russell, supra. In that case, in an opinion by the late Mr. Justice Voorhees, the court held that a tax levied upon property passing by will by virtue of the act of 1894 is not a property tax to which the provision of the Constitution invoked in the present case by the prosecutrix was designed to apply.

In Neilson v. Russell, supra, Mr. Justice Garrison, speaking for the Supreme Court, on page 33 of 76 N. J. Law, on page 479 of 69 Atl., says:

"Examination will show that the concensus of judicial opinion is that the impost we are considering is not a tax upon property, but is a premium or privilege upon the devolution of property—in fine, a succession tax—and that, as such, it rests fundamentally upon the sovereign right of a state to withhold, and hence to limit, the right of testamentary disposition or of intestate succession."

But it is further argued for the prosecutrix that the acts of 1909 and 1914 are in violation of the Fourteenth Amendment to the Constitution of the United States, and also of paragraphs 1 and 2 of article 1 of the state Constitution, in that said acts prescribe arbitrary and unequal classification and arbitrary and unequal exemptions. As a demonstration of this assertion it is pointed out that the prosecutrix was a daughter of the decedent, and as such, under the act of 1909, which imposes a duty or tax of 5 per cent. upon the transfer of any property, real or personal, of the value of $500 or over, but excepts from the operation of the act lineal descendants and certain classes of collateral and other relatives and connections, she was exempt, and that therefore the transfer was not taxable; that the effect of the act of 1914 was to make those previously exempt under the act of 1909 subject to a duty or transfer tax, the rate of tax being graded on the value of the property transferred, increasing in rate with the increase in value of the property transferred, and that this is unlawful discrimination in violation of the constitutional provisions referred to.

The like character of attack was made on the inheritance tax law of the state of Illinois, a statute similar in its provisions to the acts under consideration, and the Supreme Court of the United States, in an opinion by Mr. Justice McKenna, decided that that act was not in conflict with the Fourteenth Amendment to the Constitution of the United States. Magoun v. Illinois Trust & Savings Bank, 170 U. S. 283, 296, 18 Sup. Ct. 594, 42 L. Ed. 1037.

Section 1 of the Illinois statute provided, inter alia, that when the...