Clapp, Jayne and Francis. The opinion of the court was delivered by Jayne, J.A.D.
[32 NJSuper Page 125] One John G. Volker, a resident of Wycoff, Bergen County, New Jersey, died testate on November 18, 1951. It is sufficiently explanatory to state that by paragraph "Second" of his last will and testament he bequeathed $500 to the Wartburg Orphans' Farm School of the Evangelical Lutheran Church, located at Mt. Vernon, Westchester County, New York, and by paragraph "Seventh" he established a residuary trust for the benefit of his widow
and devised and bequeathed upon the termination of the trust by her death three-fourths of the corpus of the trust also to the Wartburg Orphans' Farm School.
In estimating the amount of the transfer inheritance tax assessment to be levied upon the testamentary transfers to Wartburg Orphans' Farm School, hereinafter designated as Wartburg, the Division of Taxation pursuant to R.S. 54:36-1 valued the three-fourths interest of the principal of the residuary trust at $48,651.02, resulting in a total beneficial interest of Wartburg in the decedent's estate of the value of $49,151.02 and a tax of $2,207.55.
The tax was calculated upon the determination of the Division of Taxation that the beneficiary, Wartburg, was an orphan asylum and that the testamentary transfers should be taxed at the rate of 5% on that portion of the beneficial interest acquired by the beneficiary in excess of $5,000 as prescribed by R.S. 54:34-2 b.
The executor of the decedent and Wartburg, the beneficiary, impugn the legal and factual propriety of the tax so assessed with the insistence that Wartburg was and is an educational institution within the import of R.S. 54:34-4 d as amended and therefore exempt from all transfer inheritance taxation. The contrariety of opinion between the Division and the appellants in this respect projects the sole question before us for decision.
In directing our attention initially to the amplitude of the factual foundation supporting the assessment, the generalities contained in the information supplied by the appellants are immediately noticeable. The opportunities afforded the appellants to introduce oral testimony descriptive of the principal and primary functions of the institution were not accepted. Our source of information from which to ascertain the superior and predominant aim, object, and intended purpose of Wartburg is necessarily confined to the contents of its corporate charter, of a fund-soliciting brochure, and of the affidavits of the appellants' counsel to which references will be presently made.
It must be acknowledged that the burden of proving "free from fair doubt" that the transfers are exempt from taxation under the terms of the statute devolves upon the appellants and that a statutory grant of exemption from taxation should not be construed to extend in scope beyond the ordinary import and signification of the terms of the concession. Sisters of Charity v. Cory , 73 N.J.L. 699 (E. & A. 1907); Carteret Academy v. State Board, etc. , 102 N.J.L. 525 (Sup. Ct. 1926), affirmed 104 N.J.L. 165 (E. & A. 1927); City of Trenton v. State Board of Tax Appeals , 127 N.J.L. 105 (Sup. Ct. 1941), affirmed sub nom. City of Trenton v. Rider College , 128 N.J.L. 320 (E. & A. 1942); College of Paterson v. State Board of Tax Appeals , 131 N.J.L. 57 (Sup. Ct. 1943); Trustees of Rutgers University v. Piscataway Tp. , 134 N.J.L. 85 (Sup. Ct. 1946); Borough of Edgewater v. Connoil Corp. , 4 N.J. Super. 338 (App. Div. 1949).
Two relatively recent opinions are informative of the course and destination of our inquiry in a case of this nature. The citations are Tappan Washington Memorial Corp. v. Margetts , 9 N.J. Super. 212 (App. Div. 1950), and Board of National Missions v. Neeld , 9 N.J. 349 (1952). Both of those decisions express the conviction that the Legislature intended to establish a distinction between the classifications of the institutions designated in R.S. 54:34-2(b) from those individualized in R.S. 54:34-4(d).
And so, more specifically recognized, our task in the consideration of the present appeal is to determine whether the appellants submitted evidence which proved free from a fair doubt that the beneficiary was at the time of the testamentary transfers an educational institution comprehended by the reasonably interpreted import of R.S. 54:34-4 d. Our Supreme Court has declared that in order that a transferee may successfully claim a complete exemption under the cited section of the statute as an educational institution, it must be made to appear that the primary and dominant object of the organization is educational. It is not sufficient
to reveal that an educative function is incidentally pursued in furtherance of another more predominant purpose. Board of National Missions v. Neeld, supra. Vide , also, In re DePeyster's Estate , 210 N.Y. 216, 104 N.E. 714 (Ct. App. 1914); Ancient and Accepted Scottish Rite of Freemasonry v. Board of ...