Torrance v. Edwards

• Decision Date: 09 November 1916
• Citation: 89 N.J.Law 507,99 A. 136
• Parties: TORRANCE v. EDWARDS, Comptroller of the Treasury.
• Court: New Jersey Supreme Court

99 A. 136

89 N.J.Law 507

TORRANCE

v. EDWARDS, Comptroller of the Treasury.

Supreme Court of New Jersey.

Nov. 9, 1916.

Certiorari by Anna B. Torrance, executrix, etc., against Edward I. Edwards, Comptroller of the Treasury of the State of New Jersey, to review an inheritance tax assessment. Writ dismissed, and assessment affirmed.

Argued June term, 1916, before SWAYZE, MINTURN, and KALISCH, JJ.

Stephen H. Little, of Morristown, for prosecutrix. Theodore Backes, of Trenton, and Herbert Boggs, of Newark, for defendant.

KALISCH, J. The matter in controversy in this case relates to the legality of the method of computation adopted by the defendant in ascertaining and levying an assessment under the inheritance tax act.

The construction of that part of subsection 4 of section 1 of the inheritance tax act (P. L. 1914, p. 269) dealing with exemptions and the imposition of a graduated transfer tax upon decedents' estates is involved. The decedent, a widow, died September 3, 1915, leaving a will, by which instrument she bequeathed and devised her entire estate to her daughter, the prosecutrix. There is no controversy regarding the value of the estate, as appraised by the comptroller.

The value of the estate, both personal and real, was appraised at....

$248,152.16

Debts, expenses, etc................

9,035.30

Net for distribution...................

$239,116.86

Exempt interests .....................

5,000.00

Taxable interests .................

$234,116.86

The tax assessed was $3,732.34, and was computed as follows:

Exempt .....................

$5,000.00

1% on .....................

45,000.00= $ 50.00

1 1/2% on ................

100,000.00= 1,500.00

2% on .......................

89,116.80= 1,782.34

$234,116.86=$3,732.34

The prosecutrix claims that the tax should have been assessed as follows:

1% on ..............

$ 50,000.00=$ 500.00

1 1/2% on ................

150,000.00= 2,250.00

2% on .............

34,116.86= 682.34

$239,116.86=$3,432.34

It is obvious that the rule of computation contended for by the prosecutrix differs materially from the rule in that respect adopted by the defendant. By comparing the results arrived at by the two methods of computation of the tax, it appears that the result of the defendant's computation exceeds by $300 the amount which the prosecutrix contends is legally assessable under the statute.

For the prosecutrix it was argued: That the act of 1914 was copied from the New York statute on the subject, and hence that it will be assumed that the New York statute was taken by our Legislature with the construction put upon it by the courts of that state. That under the decisions of the courts of the state of New York a method of computation such as was adopted in the present case by the defendant was held to be erroneous, whereas the method of computation as contended for the prosecutrix was declared to be the proper rule.

In this connnection it becomes important to mention that the provision in the inheritance tax act of 1910 of the state of New York relating to the graduating of taxes (Laws N. Y. 1910, c. 706) was amended in 1911 (Laws 1911, c. 732). A comparison of the provision of the graduated tax act of New York of 1910 with the provision of subsection 4 of our act of 1914 will show a marked dissimilarity in language. It was the act of 1910 which was construed in the case of In re Jourdan's Estate (1910) 70 Misc. Rep. 159, 128 N. Y. Supp. 728, and 206 N. Y. 653, 99 N. E. 1109. The construction given to the act of 1910 by the courts of the state of New York is significant, in that it was founded upon the use of the language employed in the act graduating the tax, for example, such as:

"Upon all amounts in excess of the said twenty-five thousand dollars and up to and including the sum of one hundred thousand dollars."

It was on the use of the words "and including" in the act of 1910, and which are not contained in the New Jersey statute, that the New York courts rested the construction contended for by the prosecutrix. It is true that in 1911 the New York statute was amended, and the words "and including" omitted from the provisions referred to, and that the same question that was raised in the Jourdan Case, supra, was again raised under the act of 1911 in Re Herman Schwartz, where it was held by Surrogate Fowler that, though there was a change in the language of the statute, the decision of the Court of Appeals in the Jourdan Case was controlling. This decision was affirmed by the Appellate Division, without opinion, but not unanimously. In re Schwarz, 156 App. Div. 931, 141 N. Y. Supp. 349, same case on appeal 209 N. Y. 537, 102 N. E. 1113. It is apparent that the omission of the words "and including" from the New York statute of 1911 makes the resemblance between the provisions of the New York and New Jersey statutes relating to the graduating tax very close.

While we recognize the force of the rule laid down in Neilson v. Russell, 76 N. J. Law, 655, 71 Atl. 286, 19 L. R. A. (N. S.) 887, 131 Am. St. Rep. 673, Clay v. Edwards, 84 N. J. Law, 221, 86 Atl. 548, and Hopper v. Edwards, 88 N. J. Law, 471, 96 Atl. 667, that where the Legislature enacts a provision taken from a statute of another state, in which the language of the act has received a settled construction, it is presumed to have intended that such provision should be understood and applied in accordance with that construction, we do not think that this rule is applicable with full force here, since it is clear that to adopt the construction of the New York courts...