Clapp, Jayne and Francis. The opinion of the court was delivered by Jayne, J.A.D.
Only a few words are necessary to reveal the factual substructure of the present appeal. John Sutman, a resident of the Borough of Highlands, Monmouth County, died intestate on October 8, 1953, leaving him surviving a niece, Clara Jane Bravand, the daughter of his deceased brother, as his nearest next of kin and heir at law.
Letters of administration were issued to her on November 12, 1953 and on June 2, 1954 in her representative capacity she filed with the Transfer Inheritance Tax Bureau of the Division of Taxation a report of the assets of the decedent's estate of the appraised net value of $32,212.16, to which entire estate she claimed to be entitled as the niece, i.e. , sole next of kin and heir of the decedent.
On August 11, 1954 the Bureau levied an assessment of transfer inheritance taxes on the transfer in the amount of $2,576.97 which was computed at the rate of 8% as prescribed by N.J.S.A. 54:34-2(d).
The rate and amount of the tax assessment are the subject matter of the present litigation, and the discord evolves from the following mutually admitted circumstances.
The appellant, Clara Jane Bravand, was the natural and lawful child of Nicholas Sutman, the decedent's brother, and Annie S. Sutman. Her father, Nicholas Sutman, died on
January 28, 1901. The decedent married his sister-in-law Annie on May 30, 1901, at which time the appellant was 13 years of age. Clara, the niece, thus became also the stepdaughter of the decedent.
Upon the occurrence of the marriage a mutually acknowledged relationship of parent and child between the decedent and Clara originated, which notwithstanding her marriage to Rudolph J. Bravand on April 2, 1919 continued until her stepfather's death.
In determining the rates to be applied to the taxation of transfers embraced by the pertinent statute, the Bureau is normally governed by the provisions of N.J.S.A. 54:34-2 which, after specifying the rates applicable (a) to parents, spouses, natural and adopted children of the decedent, (b) to religious and charitable institutions, and (c) to brothers and sisters, wife or widow of a son, and husband or widower of a daughter, provides in subdivision (d) that the transfer to every other transferee, distributee or beneficiary not therein-before classified shall be taxed at 8% on any amount up to $900,000. The last mentioned rate is undoubtedly the one to be adapted to a taxable transfer to a niece of a decedent.
However, in view of the facts in the present case, the provisions of N.J.S.A. 54:34-2.1 cannot be ignored. Accuracy and precision recommend the quotation here of the significant paragraphs of the section:
"The transfer of property passing to any child to whom the decedent for not less than ten years prior to such transfer stood in the mutually acknowledged relation of a parent, provided such relationship began at or before the child's fifteenth birthday and was continuous for ten years thereafter, shall be taxed at the same rates and with the same exemptions as the transfer of property passing to a child of said decedent born in lawful wedlock.
The transfer of property passing to a stepchild of a decedent shall be taxed at the same rates and with the same exemptions as the transfer of property passing to a child of said decedent born in lawful wedlock."
Here it is a stipulated fact that the appellant was a stepchild of the decedent, and moreover for more than ten years prior to the intestate distribution to her and before her
fifteenth birthday there originated and continued between the decedent and herself a mutually acknowledged relationship of parent and child.
True, it is a general principle of law that the alleged right of a claimant to a total or partial exemption from taxation perhaps in any legitimate form must be clearly established "free from fair doubt." Sisters of Charity of St. Elizabeth v. Cory, Coll'r. , 73 N.J.L. 699 (E. & A. 1907); Trenton, City of, v. State Board of Tax Appeals , 127 N.J.L. 105 (Sup. Ct. 1941), affirmed sub nom. Trenton, City of, v. Rider College , 128 N.J.L. 320 (E. & A. 1942); Trustees of Rutgers University v. Piscataway Twp. , 134 N.J.L. 85 (Sup. Ct. 1946); New ...