In re Ferris' Estate

• Decision Date: 27 June 1923
• Citation: 121 A. 692
• Parties: In re FERRIS' ESTATE.
• Court: New Jersey Supreme Court

121 A. 692

In re FERRIS' ESTATE.

Prerogative Court of New Jersey.

June 27, 1923.

In the matter of the estate of Murray Whiting Ferris, deceased. From an assessment and levy of the transfer inheritance tax by the comptroller, the executors appeal. Record remitted with instructions to correct assessment in accordance with opinion.

Smith & Slingerland, of Newark, for appellant.

Thomas F. McCran, Attorney General, for the State.

BUCHANAN, V. C. The executors of the estate of Murray Whiting Ferris, deceased, appeal from the comptroller's assessment and levy of transfer inheritance tax, contending that the comptroller erred: (1) In appraising at an excessive valuation 1,000 shares of the preferred stock of the Ferris Company; and (2) in including in the appraisal of the decedent's estate 220 shares of the common stocks of the same company, which said last-named shares appellants contend were not the property of decedent, but were the property of one John J. Magovern.

As to the first issue, it is sufficient to say there is nothing in the record which would justify this court in determining that the comptroller erred in his appraisal of the 1,000 shares of preferred stock. This, indeed, was tacitly admitted by appellants on the argument.

As to the second issue, the 220 shares of common stock in question had been the subject of a contract between Magovern and decedent some years prior to the latter's death. The terms of that contract were evidenced by a written agreement executed some time subsequent to the making of the actual contract. It is contended on behalf of the state that the result of this contract was that the ownership of the shares of stock in question remained in Mr. Ferris, with a transfer thereof to Magovern, to take effect at the death of Ferris.

It is clear to my mind that such was not the situation in fact, at least as to the entire beneficial ownership of the shares of stock. By the transaction in question, a then present transfer of the beneficial ownership, or equitable ownership, of these shares, from Ferris to Magovern, was effectuated, except that Ferris retained the right to vote the shares of stock in question (and, to that end, the right to have the shares remain of record in his own name on the books of the company) during his own lifetime, or so long as it should be necessary for Ferris to retain control of the 220 shares to enable him to maintain his majority vote in the company. There is a further provision in the...