In re Estate of Harvey

New Jersey Superior Court App Division

In re Estate of Harvey

129 A. 393, 2 N.J. Misc. 247, 1924 N.J. Prerog. Ct. LEXIS 23

CourtNew Jersey Superior Court Appellate Division

DecidedMarch 26, 1924

StatusPublished

Cited by23 cases

This text of 129 A. 393 (In re Estate of Harvey) is published on Counsel Stack Legal Research, covering New Jersey Superior Court Appellate Division primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

In re Estate of Harvey, 129 A. 393, 2 N.J. Misc. 247, 1924 N.J. Prerog. Ct. LEXIS 23 (N.J. Ct. App. 1924).

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Opinion

Buchanan-, Y. O.

The executor of the estate of Charles B. W. Harvey appeals from the assessment of transfer tax by the comptroller.

Testator died July 9th, 1922, a resident of this state. In April, 1907, he had made an agreement with the Moravian Seminary, of Bethlehem, Pa., whereby he was, within” sixty days, to pay to the seminary $25,000 and convey to it also a certain residence property in Essex county. The seminary was to pay him five per cent, interest on the $25,000 during his life and lease the property to him, for his lifetime, rent free, for his own occupancy or to sublet for his own benefit, he to pay the taxes and upkeep.

This agreement was performed on both sides. The comptroller has assessed a tax in respect of the said $25,000, and in respect of the residence property, appraised at $19,000, as a gift or transfer to take effect at death. Appellant contends this was error; that the transfers took effect immediately in 1907.

Of course, as a matter of legal technicality, the actual transfers of title did take effect in 1907. The question to be determined, however, is what was the substance and effect [248]*248of the entire transaction? As to the house, it-amounted to a conve3rance of the remainder, subject to a life estate in testator; it was a transfer intended to take effect in beneficial possession and enjoyment at testator’s death. Until testator’s death he himself retained the beneficial enjoyment of the property. So also with the $25,000. He retained the beneficial enjoyment of that during his lifetime, for by the terms of the agreement the donee was to pay_ him “interest” on that very sum of $25,000 during his life, at five per cent, (which is the generally accepted ordinary rate for safe investment income).

Appellant further contends that in any event the transfers in question are not taxable, because the statute in force in 1907 did not provide for the assessment of a tax thereon, the provisions in that behalf being enacted in 1922, shortly before testator’s' death. In view of Carter v. Bugbee, 91 N. J. Law 438; Id., 92 N. J. Law 390, and American Board, &c., v. Bugbee, 118 Atl. Rep. 700, that question cannot be considered as open for determination b3r this court.

The appeal must be dismissed.

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Buchanan-, Y. O.

The executor of the estate of Charles B. W. Harvey appeals from the assessment of transfer tax by the comptroller.

Testator died July 9th, 1922, a resident of this state. In April, 1907, he had made an agreement with the Moravian Seminary, of Bethlehem, Pa., whereby he was, within” sixty days, to pay to the seminary $25,000 and convey to it also a certain residence property in Essex county. The seminary was to pay him five per cent, interest on the $25,000 during his life and lease the property to him, for his lifetime, rent free, for his own occupancy or to sublet for his own benefit, he to pay the taxes and upkeep.

This agreement was performed on both sides. The comptroller has assessed a tax in respect of the said $25,000, and in respect of the residence property, appraised at $19,000, as a gift or transfer to take effect at death. Appellant contends this was error; that the transfers took effect immediately in 1907.

Of course, as a matter of legal technicality, the actual transfers of title did take effect in 1907. The question to be determined, however, is what was the substance and effect [248]*248of the entire transaction? As to the house, it-amounted to a conve3rance of the remainder, subject to a life estate in testator; it was a transfer intended to take effect in beneficial possession and enjoyment at testator’s death. Until testator’s death he himself retained the beneficial enjoyment of the property. So also with the $25,000. He retained the beneficial enjoyment of that during his lifetime, for by the terms of the agreement the donee was to pay_ him “interest” on that very sum of $25,000 during his life, at five per cent, (which is the generally accepted ordinary rate for safe investment income).

Appellant further contends that in any event the transfers in question are not taxable, because the statute in force in 1907 did not provide for the assessment of a tax thereon, the provisions in that behalf being enacted in 1922, shortly before testator’s' death. In view of Carter v. Bugbee, 91 N. J. Law 438; Id., 92 N. J. Law 390, and American Board, &c., v. Bugbee, 118 Atl. Rep. 700, that question cannot be considered as open for determination b3r this court.

The appeal must be dismissed.

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Bluebook (online)

129 A. 393, 2 N.J. Misc. 247, 1924 N.J. Prerog. Ct. LEXIS 23, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-estate-of-harvey-njsuperctappdiv-1924.

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