134 A. 646 | N.J. Super. Ct. App. Div. | 1926
John G. Van Riper, a resident of Passaic county, died testate on March 18th, 1906. By his last will the residue of *265 his estate, real and personal, was devised and bequeathed to his executor, Frank Van Cleve, in trust, nevertheless, to pay the income therefrom to the decedent's sister, Getty Anna Christy, for the term of her natural life, and upon her death to pay a certain legacy to a grandniece, and to divide the residue equally between certain grandnieces and a grandnephew.
Under the provisions of P.L. 1894 p. 318, a collateral inheritance tax was charged against the interests in remainder, after deducting the life estate of Getty Anna Christy, and that tax was assessed, in accordance with the provisions of the act, at the sum of $383.35, notice of which was forwarded by the comptroller to the executor, which tax, under P.L. 1903 p. 128, was not payable until the death of Getty Anna Christy, which occurred on January 19th, 1912. Following her death, Mr. Van Cleve made application for a bill, showing the amount of collateral inheritance tax chargeable against the estate, and such a bill was forwarded to him with a statement thereon that if the tax were not paid within thirty days of the death of the life tenant, interest would be added at the rate of ten per cent. per annum from that date until the date of payment. The executor, however, did not pay the bill.
The question is, whether the executor, Mr. Van Cleve, is personally liable to pay this tax or whether he is liable only in his representative capacity as executor, to the extent of assets which came to his hands, which are still liable in the hands of the distributees — remaindermen.
The comptroller insists that personal liability of Mr. Van Cleve is definitely established by sections 1, 6 and 8 of the act of 1894, supra, the pertinent parts of which are as follows:
"Section 1 (subjects the estate to a tax to be paid to the state treasurer), and provides that all administrators,executors and trustees shall be liable for any and all such taxesuntil the same shall have been paid as thereafter directed."
"Section 6 (enacts that the executor, administrator or trustee shall collect the tax, c.), and provides that he shallnot deliver or be compelled to deliver any specific legacy orproperty subject to tax to any person until he shall havecollected the tax thereon." *266
"Section 8 (enacts that such officer shall pay any tax retained by him within thirty days thereafter to the state treasurer, and that the receipt therefor, signed by the treasurer and countersigned by the comptroller, shall be a proper voucher in the settlement of his accounts), and provides that anyexecutor, administrator or trustee shall not be entitled tocredit in his accounts nor be discharged from liability for suchtax unless he shall produce a receipt so countersigned by thecomptroller, or a copy thereof certified by him."
Counsel for Mr. Van Cleve contends that although our statute provides that the executor shall be liable, in no place does it show that the executor shall be personally liable, and urges that section 1, paragraph 4 of the Transfer Inheritance Tax act of 1909 (P.L. p. 325) shows a contrary intent. That statute enacts that all taxes imposed shall be paid to the state treasurer, and that all administrators, executors, trustees, grantees, donees or vendees shall be personally liable for any or all such taxes until the same have been paid as thereinafter directed, for which an action of debt shall be in the name of the State of New Jersey. The provision thereinafter enacted for the liability of executors is to be found in section 2, which enacts that where property is devised or bequeathed in remainder, that the tax on the life estate shall be immediately levied and assessed, and the tax on the remainder shall be levied and assessed immediately also, but shall not become due or payable until the time when the remaindermen shall become entitled to the actual possession and enjoyment of such property, and if not paid within thirty days, interest at the rate of ten per cent. per annum shall be charged and collected from the time when the tax becomes due and payable; that if the property passing to remaindermen shall be personal property, such remaindermen or the executor or trustee of the estate shall give bond to the State of New Jersey, conditioned to pay said tax and any interest which may fall due thereon, and any executor or trustee who shall assign or deliver to any such remaindermen any personal property liable to tax under the act, unless bond be given as specified, or said tax be paid, shall be personally liable for said tax and all interest thereon, c. *267
It is true that the act of 1894 does not, in terms, impose personal liability upon the executor, while the act of 1909 does. However, there is nothing apparent on the face of the act of 1909 which indicates a legislative purpose to impose a penalty not contained in the earlier act. Besides, the decision of the New York courts both In re Vanderbilt's Estate and In re Strang,infra, construing the New York act of 1885, from which our act of 1894 was copied, as imposing personal liability upon executors, when, in terms, that act, like our own, did not visit such penalty, would indicate that our legislature, in passing our act of 1909, concluded to write into it a provision arising out of the construction of the New York act by the New York courts.
It is conceded that there is no decision in this state upon the particular question now before the court. But there is no dispute but that our Collateral Inheritance Tax act of 1894 is substantially a copy of that of the State of New York of 1885. And the courts of New York have decided a similar question under their act, as just mentioned above.
In re Vanderbilt's Estate (1890), 10 N.Y. Supp. 239, Surrogate Ransom held that the laws of New York, 1885, chapter
In re Strang (1907),
In Clay v. Edwards,
In Hopper v. Edwards,
In re Christie's Estate,
This rule is subject to the qualification that where the language of a New Jersey statute is clear and unambiguous, the courts of this state will not go back of the language of the statute and consider the construction placed upon a similar statute by a foreign jurisdiction, especially when there is a difference in the construction in courts of sister states.Torrance v. Edwards,
As the New York Inheritance Tax act of 1885 was construed in the surrogate's court (1890) and in the supreme court (1907), as imposing a personal liability upon the executor, instead of a representative one, to the extent of assets for the payment for such tax, and as our act of 1894 does not, in clear and unambiguous language, provide a representative, instead of a personal, liability, I regard it as my duty to adopt their construction and apply it to our act and hold that an executor is personally liable, provided, of course, that he had assets sufficient to pay and discharge the tax; and especially so, as such liability is apparent upon a rational construction of our act, irrespective of the decisions of the courts of New York.
Counsel for the defendant asserts that this action is brought and prosecuted under P.L. 1894 p. 318 § 16, which provides that the citation shall cite the persons interested in the property liable to the tax to appear before the ordinary, c., and this he contends in conjunction with section 2 of the same act, which provides that the tax prescribed by it on the remainder shall be immediately due and payable to the treasurer of the state, together with interest thereon, and shall be and remain a lien on said property until the same is paid, and that as the remaindermen have not been brought in with *270 the executor, the proceeding is defective for want of proper parties.
It is to be observed that the statute makes the estate, and also the executor, liable to the tax. If the beneficiaries were brought in as parties, because interested as parties, the state could, nevertheless, elect to make the money out of the executor. Therefore, it is not perceived how the executor is injured by the non-joinder of parties who would also be liable if the state chose so to make them. Of course, in a case where an executor himself had nothing the state could make the tax money out of the estate passing to the beneficiaries. But where the executor is a man of substance, as in this case, and the state chooses to pursue him for the tax for which he is personally liable, he cannot escape responsibility or stall the proceedings by asserting that others are liable if the state chose to pursue them. The doctrine is that an objection for want of proper parties, taken at the hearing of a bill in equity, will not prevail unless such parties are necessary to the final determination of the case. Van Doren v. Robinson,
In re Cassidy's Will,
It seems to me, and I so hold, that the rule in equity applying to the joinder or non-joinder of parties, obtains in the prerogative court. Therefore, upon this score the beneficiaries in remainder, although they would be proper parties, are not necessary parties, and their non-joinder does not operate to defeat or abate the comptroller's proceeding in this cause.
The result reached is that the comptroller is entitled to a decree against the defendant for the amount of the tax, with interest and costs.
This cause was submitted on March 16th last, since which time Mr. Van Cleve, the defendant, has departed this life. In this situation, and to avoid the necessity of revivor and substitution of parties on a record, the law very wisely provides that the decree to be rendered on this hearing may be entered nunc protunc as of the time of the submission of the cause. Dan.Ch. Pl. Pr. (6th Am. ed.) [*]1017; 21 C.J. 652.
Where a party dies after his cause is finally submitted for decision, the court has the power to enter the decree as of the term when, in the lifetime of the party, the cause, after argument, was finally submitted for decision. Mitchell v.Overman,
The petition of the comptroller, the answer of the defendant, and other papers filed in this cause, are entitled "Before the Ordinary." They should have been entitled "New Jersey Prerogative Court." The Collateral Inheritance Tax act of 1894 (P.L. 318 § 15) provides that the ordinary, and the orphans court in certain cases, shall have jurisdiction to hear and determine all questions in relation to the tax arising under the provisions of that act. And the Transfer Inheritance Tax act of 1909 (P.L.p. 325) provides, in section 18, that any person dissatisfied with an appraisement or assessment made by the comptroller may appeal therefrom to the ordinary; section 20 enacts that the ordinary shall have jurisdiction to hear and determine all questions in relation to any tax levied under the provisions of that act; section 21 enacts that if it shall appear to the comptroller that any tax which has accrued under the act has not been paid, he shall report such fact in writing to the register of the prerogative court, and said register shall issue a citation to the persons interested in the property liable to tax to appear before the ordinary and show cause why such tax should not be paid; service of citation and subsequent proceedings to conform to the practice prevailing in the prerogative court, and section 22 provides that whenever the comptroller shall have reason to believe that any tax is due and unpaid he shall notify the attorney-general in writing, and the attorney-general, if he have probable cause to believe the tax to be due and unpaid, shall prosecute the proceedings before the ordinary provided for in section 21. Proceedings by the state under sections 21 and 22 are the converse of the proceedings under section 18 by the party interested in the property assessed.
In re Dittman's Executors,
Let a decree be entered in the prerogative court for the comptroller against the defendant, for the amount of the tax with interest and costs nunc pro tunc as of the date when this cause was argued and submitted. The other papers will be amended by similarly entitling them in this court.