Koch v. McCutcheon

• Decision Date: 25 July 1933
• Docket Number: No. 234.,234.
• Citation: 167 A. 752
• Parties: KOCH v. McCUTCHEON, Comptroller of the Treasury.
• Court: New Jersey Supreme Court

167 A. 752

KOCH

v. McCUTCHEON, Comptroller of the Treasury.

No. 234.

Supreme Court of New Jersey.

July 25, 1933.

Proceedings by John McCutcheon, Comptroller of the Treasury of New Jersey, opposed by John H. Koch, trustee under a trust indenture made by George Schlegel, deceased, for a writ of certiorari to review a decree of the Prerogative Court (111 N. J. Eq. 324, 162 A. 651) which reversed an assessment by the Comptroller of an inheritance tax on property conveyed by deceased.

Decree reversed, and assessment affirmed.

Argued January term, 1933, before PARKER, LLOYD, and HEHER, JJ.

William A. Stevens, of Red Bank (William A. Moore, of Trenton, of counsel), for prosecutor.

John Trier, of Newark, for respondent.

LLOYD, Justice.

The writ is to review a decree of the Prerogative Court which reversed an assessment by the comptroller of an inheritance tax on property conveyed by George Schlegel, now deceased, by a deed of trust to one Koch.

Schlegel died in 1928. He was a resident of New York, but left some property in this state upon which the comptroller assessed the tax. In 1922 Schlegel executed the deed of trust comprising real and personal property valued at approximately $1,000,000. Included in this was the real estate in New Jersey valued at $164,900. The property conveyed, consisting of stocks, moneys, and real estate, was transferred to Koch in trust to permit the donor's wife to use the real property in this state and to receive the income from the remainder of the trust property for her lifetime or until her remarriage. Upon the death or remarriage of the wife, the income went to the children; the trust terminating at the death of the survivor of the donor and his wife by the vesting of the corpus of the estate in the children.

The wife and children all survived the donor, and the widow remained unmarried. The life estate of the wife was not assessed, but the remainder interests were assessed under chapter 228 of the Laws of 1909 as amended by chapter 228 of the Laws of 1927 (Comp. St. Supp. § 208—537), which provides that a tax shall be imposed upon the "transfer * * * of real property within this State, or of goods, wares and merchandise within this State, made by a nonresident, by deed, grant, bargain, sale or gift 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 was recognized in the opinion of the learned Vice Ordinary that there was effected by the deed, if the several gifts therein mentioned were to be separately considered, a transfer of the corpus of the estate to the children to take effect in possession or enjoyment by the children at or after the donor's death, and that such transfer comes within and is made taxable by the express terms of the statute, but the opinion proceeds to hold...