Neilson v. Russell

• Citation: 69 A. 476,76 N.J.L. 27
• Parties: NEILSON et al. v. RUSSELL et al.
• Decision Date: 28 March 1908
• Court: New Jersey Supreme Court

69 A. 476

76 N.J.L. 27

NEILSON et al.

v. RUSSELL et al.

Supreme Court of New Jersey.

March 28, 1908.

(Syllabus by the Court.)

Certiorari by Albert Neilson and William T. Evans against George E. Russell, surrogate, and J. Willard Morgan, comptroller, to review an assessment under collateral inheritance tax act. Assessment affirmed.

Philo Laos Mills, the testator, resided in England, and died there on the 23d day of August, 1905, leaving a last will and testament, which was duly admitted to probate in England on the 13th of November, 1905, and an exemplified copy thereof admitted to probate by the surrogate of Essex county, this state, and letters testamentary granted to William T. Evans, a resident of Montclair, this state, and Alfred Neilson, a resident of New York state, the two American executors named in said will, who qualified and took office. The testator had no real property in the state of New Jersey, but at the time of his death was the owner of, and had in his possession at his residence in England, the certificates of 8,889 shares of the common stock of Mills & Gibb, a corporation organized under the laws of this state, with its registered office in East Orange. The English executors, upon entering on their duties, took possession of these certificates of stock, and retained possession of them until March 1, 1907, when they were sent by the English executors to the American executors, and were received by William T. Evans, the New Jersey executor, at his residence in Montclair. By the terms of the will of the testator the income from the said shares of stock was bequeathed to the widow of the testator, Susan Neilson Mills, during her natural life, after the termination of which the income and ultimately the shares of stock are to go to nephews and nieces. The value of these shares has been appraised and assessed by the surrogate of Essex county under the provisions of our inheritance tax act (P. L. 1894, p. 318).

No question is raised as to the manner of the assessment, but the first and second reasons assigned raise the question whether the shares of capital stock of a New Jersey corporation represented by certificates held by a nonresident at the time of his death at his domicile outside of this state, and which are finally to pass to persons who are not exempt by our collateral inheritance tax law, are liable to taxation under the first section thereof, which reads:

"That after the passage of this act all property which shall pass by will or by the intestate laws of this state from any person who may die seised or possessed of the same while being a resident of the state, and all property which shall be within this state, and any part of such property, and any interest therein or income therefrom, which shall be transferred by inheritance, distribution, bequest, devise, deed, grant, sale or gift aforesaid, made or intended to take effect in possession or enjoyment after the death of the intestate, testator, grantor or bargainor, to any person or persons, or to a body politic or corporate, excepting churches, hospitals and orphan asylums, public libraries, Bible and tract societies, and all religious, benevolent and charitable institutions and organizations, in trust or otherwise, or by reason whereof any person or body politic or corporate shall become beneficially entitled in possession or expectancy, to such property, or to the income thereof, other than to or for the use of the father, mother, husband, wife, children, brother or sister, or lineal descendants born in lawful wedlock, or the wife or widow of a son, or the husband of a daughter, shall be subject to a tax of five dollars on every hundred dollars of the clear market value of such property, to be paid to the treasurer of the state of New Jersey for the use of the state, and all administrators, executors and trustees shall be liable for any and all such taxes until the same shall have been paid as hereinafter directed; provided, that an estate which may be valued at a less sum than five hundred dollars shall not be subject to said duty or tax."

Argued November term, 1907, before GARRISON, REED, and PARKER, JJ.

Coult, Whiting & Smith (Frank R. Lawrence and Frank Lawrence, on the brief), for the prosecutor. Theodore Backes and Robert H. McCarter, Atty. Gen., for defendants.

GARRISON, J. On March 23, 1892, the Legislature of this state enacted a law (P. L. 1892, p. 206) imposing an ad valorem tax of 5 per cent. upon "all property which shall be within this state, and any part of such property and any interest therein" that shall be transferred upon intestacy or by testamentary disposition to any person or persons other than those named in the act. This act, modified as to its title so as to include devises, was re-enacted on May 15, 1894 (P. L. 1894. p. 318), and is the law applicable to the present case, where the question is whether stock in a New Jersey corporation passing by the will of a nonresident decedent to collateral relatives is liable to the tax imposed by this statute.

The prosecutor contends in the first place that this statute does not apply to the personal property of a nonresident decedent.

Inasmuch as the statute does not purport to tax the owner of property while he is living, and cannot tax him after he is dead, the sole significance of his place of residence is the bearing it has upon the question whether the property he owned while living is in legal contemplation "within this state" at the time of its transference to other owners after his death. The statute itself, before proceeding by the language just quoted to subject all property within this state to the impost in question, by a special clause laid a like impost upon "all property which shall pass by will or by the intestate laws of this state from any person who may die seised or possessed of the same while being a resident of this state." The force of this specific provision is two-fold—first to impress the property of residents of this state with the provisions of our intestate laws; and, secondly, to render clear the next succeeding clause which by reason of its omission of any reference to residents of this state imposed a succession tax that was general both in scope and character.

The plain import of the words "and all property which shall be within this state" renders their construction unnecessary. Interpretation alone suffices. If, however, recourse be had to construction, its two most familiar canons constrain us to give to the words of the statute their clear and unambiguous meaning, and also to give weight to the consideration that, when the Legislature in the preceding clause intended to limit its provision to residents of this state, it knew how to do so by apt words, and that it would be contrary to all rules to impute to the Legislature in the framing of the next succeeding clause a meaningless repetition and also a sudden loss of the ability to employ, with a proper sense of their force and moaning, words that in the immediate context it had aptly and efficiently employed. On the contrary, we must deem that the omission of "residents of this state" from the general clause as to "all property" was advisedly made, and must conclude that, when the Legislature intended to impose a limitation as to residence, it knew how to express it, and that, when it failed to express it, it did not intend to impose it.

Another consideration leading to the same result arises from the circumstance that our statute is practically the counterpart of the New York collateral inheritance act of 1885, which because of certain language contained in it was held by the Court of Appeals of that state to impose no liability upon property within that state that passed from a nonresident decedent. The significance of this circumstance lies in the fact that the language of the New York statute upon which the judicial decision in question was based was entirely eliminated from our statute enacted two years after the rendition of such decision, although in all other respects our statute was the counterpart of its New York model. The features of the New York statute that led to the judicial construction referred to were, first, the use of the words "or which property shall be within this state," which the court held to be "the same property mentioned in the prior part of the section," and hence that it "had reference only to property owned by a resident of the state." In the place of these words "or which property," on which this construction had been based, our statute substituted the words "and all property," to which the construction in question cannot possibly apply.

The other feature of the New York statute considered by the court in the Matter of Enston, 113 N. Y. 174, 21 N. E. 87, 3 L. R. A. 464, which is the case referred to, was that the property mentioned in the clause it was construing was subjected to a succession tax only when "transferred by deed, grant, sale, or gift," which the court held intended only "gifts inter vivos," and not testamentary dispositions or successions. Our statute significantly supplemented the language thus construed by the interpolation of the words "transferred by inheritance, distribution, be quest, or devise," thereby completely curing the act in this respect.

The opinion in Matter of Enston was delivered April 16. 1889. Our statute was passed March 23, 1802. It is a significant circumstance to say the least that the only essential particulars in which our act departed from its New York prototype was in the two respects by force of which according to the construction of its own courts the New York statute failed to apply to the property by nonresident decedents. Such highly circumstantial coincidences are not ascribed by courts to mere chance. On the contrary, they are held to be significant earmarks for the ascertainment of legislative intent. The well-settled rule of construction is that, when a statute has been...