Ricardo v. Kelly

• Citation: 41 A.2d 901
• Decision Date: 10 April 1945
• Docket Number: No. 7150.,7150.
• Parties: RICARDO et al. v. KELLY, State Tax Com'r. In re RENNER'S ESTATES et al.
• Court: New Jersey Prerogative Court

41 A.2d 901

RICARDO et al.

v.KELLY, State Tax Com'r.

In re RENNER'S ESTATES et al.

No. 7150.

Prerogative Court of New Jersey.

April 10, 1945.

Proceeding between Winfield H. Ricardo, substituted administrator of the estate of Joseph M. H. Renner, Anne M. Conklin, representative of the estates of Carroll J. (also known as Harold J.) Renner and John Frederick Renner, deceased, and William D. Kelly, State Tax Commissioner, for a determination of transfer inheritance taxes. From a determination of the State Tax Commissioner that three inheritance tax assessments were justifiable, the petitioners appeal.

Assessments affirmed.

Syllabus by the Court.

1. It is a familiar rule that a devise of a remainder limited upon a particular precedent estate, determinable on an event which must necessarily happen, will be construed as vesting the remainder estate at the time of the death of the testatrix.

2. Conditions subsequent are not favored in the law and are strictly construed because they tend to destroy vested estates.

3. Vested estates are not to be divested unless all the events upon which the gift over is based actually happened. Where the condition is corporate the whole must be fulfilled to effect a divestiture.

4. In default of the existence of the object of the gift over, and in the absence of any other testamentary intent, the prior estate becomes absolute.

Irving Dincin, of Englewood, for petitioners-appellants.

Walter D. Van Riper, Atty. Gen. (William A. Moore, special counsel, of Trenton), for respondent.

JAYNE, Vice Ordinary.

The State Tax Commissioner upon accumulating the information presently to be divulged came to the conclusion that three inheritance tax assessments were justifiable. The present appeal necessitates an inquiry concerning their legality.

One Mary G. Bakman, a resident of Hackensack, Bergen County, New Jersey, died testate on August 3, 1908. At her death she was seized in fee of a parcel of real property in that city which she devised to her sister, Annie M. Renner, for life and the remainder estate in equal shares to her nephews, John Frederick Renner and Joseph M. H. Renner, the sons of the life tenant, to them, their heirs and assigns forever.

The estates in remainder were, however, conditionally limited by the following terms of the will:

‘In case that at the time of my sisters death either one of the two boys John Frederick Renner or Joseph M. H. Renner shall have died leaving lawful issue, then it is my will that such child or children shall take his or her parents share. In case both boys die without leaving lawful issue before the death of my sister Annie M. Renner, then I give devise and bequeath the above land and premises to the persons who by the law of descent of New Jersey would be the heirs at law of my sister Annie M. Renner, the same as if has died intestate.’

The stipulation of facts reveals that Annie M. Renner, the life tenant, survived both of her sons. She died on April 10, 1935, leaving as her heirs and next of kin, two grandchildren, Anne M. Conklin and June Renner, who are the daughters of John Frederick Renner, deceased. John Frederick Renner, a designated remainderman, died on August 17, 1930. Joseph M. H. Renner, the other son of the life tenant and also a remainderman under the will, died on July 12, 1927, and his only son, Carroll (also known as Harold) J. Renner, died on October 16, 1927, and thus also predeceased the life tenant.

It is of fleeting interest to notice that except for the proprieties of succession taxation, an interpretation of the will would be merely an academic exercise because under any determination the combination of events vests the property in the same individuals.

The taxing authority has not levied any transfer inheritance tax against the transmission of the one-half interest in remainder which was devised to John Frederick Renner, evidently because it is supposed that John (having predeceased the life tenant leaving lawful issue who survived the life tenant) was divested of his interest by the occurrence of the condition first interposed by the testatrix. The assessments here under review were made against the transfers occasioned by the devolution of title to the one-half interest in remainder devised to Joseph M. H. Renner. The stipulation explains that all transferences were by way of intestate succession. The first was from Joseph M. H. Renner to his son Carroll; the second, from Carroll to his uncle, John F. Renner; and the third, from John F. Renner to his daughters heretofore named.

A brief statement of the diversity of reasoning from which this appeal emerges will exhibit the fundamental points to be decided. To support the assessments the Commissioner insists that Joseph M. H. Renner was seized of a vested remainder in the property and that his estate therein was not divested because, although he died prior to the decease of the life tenant, his only issue, Carroll (Harold) J. Renner, also predeceased the life tenant and therefore neither testamentary limitation was divestitive of that remainder estate in the premises.

The appellants propose that the will of the testatrix can be construed to contrive an unexpressed intent on her part that the interest in question should pass in the circumstances directly to the present beneficiaries of it, and in such event the transfer was liberated from taxation by the repeal in 1927 of the taxing acts of 1892, 1893, and 1894. See Chapters 247, 248, 249, P.L. 1927; also R.S. 54:33-4, N.J.S.A. 54:33-4. Additionally, it is asserted that the assets of the estates of the three named decedents implicated in the present assessments consisted of nothing other than their interests, if any, derived from the estate of the testatrix, Mary G. Bakman.

Other elements of the tax assessments are not impugned so that the present appeal anticipates either a total cancellation or a sustaining affirmance of the assessments as levied.

Reverting now to the consideration of the terms and provisions of the Bakman will, attention is promptly engaged by the following significant language of the testatrix: ‘I * * * devise * * * unto my sister Annie M. Renner for the term of her natural life my real estate * * *. After the death of my sister Annie M. Renner, I * * * devise * * * unto her two children John Frederick Renner and Joseph M. H. Renner, my real estate * * * share and share alike, to them their heirs and assigns forever.’

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