MaCmiller v. Bugbee

• Decision Date: 03 November 1921
• Parties: MACMILLER et al. v. BUGBEE, State Comptroller.
• Court: New Jersey Supreme Court

115 A. 341

MACMILLER et al.

v. BUGBEE, State Comptroller.

Supreme Court of New Jersey.

Nov. 3, 1921.

Certiorari by John W. MacMiller and another, executors of Harry S. Harkness, deceased, against Newton A. K. Bugbee, State Comptroller, to review an assessment under the collateral inheritance tax act. Correction granted.

Argued June term, 1921, before SWAYZE, BLACK, and KATZENBACH, JJ.

Treacy & Milton, of Jersey City, for prosecutors.

Thomas P. McCran, Atty. Gen., for defendant.

SWAYZE, J. Harry S. Harkness, formerly a resident of the state of New York, owned at the time of his death, among other property, stock in several New Jersey corporations. These, with stocks of other states, were pledged as security for certain loans, stocks of both classes mingled together for each loan. They passed under Harkness' will to his widow. The total amount of his personal estate wherever situate was appraised at $15,111,105.40. The total amount of debts other than mortgages on real estate was $5,322,758.72. The net personal estate was $9,788,346.68. The debts which were secured in part by the New Jersey stocks amounted to $3,958,835.93. As the collateral for each loan was mingled together, there was nothing to mark any particular stock as security rather than another, and nothing therefore to show that New Jersey stocks should be first appropriated to satisfy the debts, nor that their use should be postponed to that of the foreign stocks. In marshaling assets, all the collateral, as far as the contract of pledge was concerned, might be brought into hotchpotch. This, in fact, is what the Comptroller did. He ascertained the total value of securities pledged for each debt, deducted the amount of the debt from the value of the securities pledged to secure it, and then ascertained the percentage of this equity to the value of the securities pledged. By multiplying the value of the New Jersey securities by this percentage, he ascertained the equity in the New Jersey securities. Each stock was thus charged with its proportionate share of the burden of the debt. The result was an equity in the New Jersey stocks of $2,216,583. We think this a proper way to ascertain the value of the New Jersey property.

Having thus ascertained the amount taxable, he had to ascertain the rate of taxation. The rule is prescribed by the statute. C. S. 5307, pl. 548. The tax imposed on New Jersey property is to bear the same ratio to the entire tax which the estate of the decedent would have been subject to under the act if the nonresident decedent had been a resident of this state, as such property located in this state bears to the entire estate of such nonresident wherever situated. Pursuant to the statute, the Comptroller ascertained that the tax on the entire estate, if all had been in New Jersey would have been...