Price v. Edwards

• Decision Date: 04 April 1916
• Citation: 97 A. 57,88 N.J.Law 582
• Parties: PRICE et al. v. EDWARDS.
• Court: New Jersey Supreme Court

97 A. 57

88 N.J.Law 582

PRICE et al.

v. EDWARDS.

Supreme Court of New Jersey.

April 4, 1916.

Certiorari by William H. Price and others, executors, against Edward I. Edwards, comptroller, etc., to review an assessment of the transfer inheritance tax against the estate disposed of by prosecutors' testatrix. Writ dismissed, and assessment affirmed.

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

W. Edwin Florance, of New Brunswick, for prosecutors. John W. Wescott, Atty. Gen., and Theodore Backes, Second Asst. Atty. Gen., for defendant.

KALISCH, J. The prosecutors' testatrix, a resident of New Brunswick, in this state, died on December 23, 1913. A transfer inheritance tax was assessed by the comptroller against the estate disposed of by her under the fifth and seventh provisions of her will. It is only necessary, for the purpose of presenting the questions raised in this case, to set out the seventh clause of the will, which provides:

"At the end of the period of ten years above mentioned I give, devise and bequeath the principal sum of my said estate then in the hands of my executors, with any and all accumulations of interest thereon, to the United Hebrew Charities, a corporation whose present address is No. 356 Second avenue, New York City, in trust to keep the same safely invested and to use the interest and income thereof for the support and maintenance of the Jewish poor people of the city of New Brunswick."

The fairness of the amount assessed is not disputed. The first objection urged by the prosecutors against the validity of the tax is that the bequests are to a charitable institution, for a charitable use within the state of New Jersey, and are therefore within the clause of the act of 1912, exempting property passing to charitable institutions. The prosecutors rely for support of their contention on the exemption contained in section 3 of the Inheritance Tax Act of 1912 (P. L. 1912, p. 368) amendatory of section 1, par. 4, Acts 1909, p. 326. Section 3 of the act of 1912 provides:

"Property passing to churches, hospitals and orphan asylums, public libraries, Bible and tract societies, religious, benevolent and charitable institutions and organizations * * * shall be exempt from taxation."

In tracing the statutory history of this exemption clause we find that in the act of 1894 (P. L. 1894, p. 318) the exemption clause excepted from the operation of the act property passing to churches, hospitals, and orphan asylums, public libraries, Bible and tract societies, and all religious, benevolent, and charitable institutions and organizations, in trust or otherwise, etc. This clause was construed in Alfred University v. Hancock, 69 N. J. Eq. 470, 46 Atl. 178, by Reed, Vice Ordinary, who held that it did not exempt gifts and bequests to charitable institutions located outside this state, from a transfer tax. And on page 471 of 69 N. J. Eq., on page 179 of 46 Atl., the learned Vice Ordinary said:

"The overwhelming weight of authority is that where the Legislature grants exemptions from such a tax to corporations or organizations, it includes in the exemption only domestic corporations and organizations."

The effect of the act of 1898, which is a supplement to the act of 1894 (P. L. 1898, p. 106), which exempts from a transfer tax Bible or tract societies, or religious institutions, boards of a church or organization thereof, in trust or otherwise, though not confined in their operations and benefactions to local or state purposes, but for the general good of the people interested therein of the United States or of foreign lands, as the board of home and foreign missions of various church denominations, regardless of the fact whether such societies, religious institutions, or boards are organized under the laws of this state or incorporated under the laws of some other state, was also considered in the case above cited, and held that the exemption did not extend to any other institutions than those expressly described and mentioned therein. It is obvious that the United Hebrew Charities, a corporation organized under the laws of the state of New York, does not come within the category of the institutions exempted by the act of 1898 from a transfer tax. It is neither a Bible nor tract society. It is not a religious institution. The mere fact that its benefactions are limited to those of the Hebrew faith does not constitute it a religious institution within the meaning of the Exemption Act of 1898. It is purely a charitable organization.

The question as to the immunity of charitable institutions not organized under the laws of this state from the imposition of a transfer tax was presented in the Case of Rothschild, 71 N. J. Eq. 210, 63 Atl. 615. In that case a bequest was made to the "Hebrew Benevolent and Orphan Asylum," a corporation of the state of New York, and Magie, Ordinary, held that it was not exempt under the act of 1898, following Alfred Universify v. Hancock, supra. This case was affirmed on appeal. 72 N. J. Eq. 425, 65 Atl. 1118. That...