For reversal -- Chief Justice Weintraub, and Justices Heher, Wachenfeld, Burling, Francis and Proctor. For affirmance -- None. The opinion of the court was delivered by Proctor, J.
The issue here is whether the adopted children of a testatrix' daughter qualify as "issue of any child" of the decedent within the meaning of N.J.S.A. 54:34-2, subd. a of the Transfer Inheritance Tax Act, L. 1909, c. 228, as amended (N.J.S.A. 54:34-1 to 13).
The facts as stipulated by the parties show that Gertrude D. Ewer died testate on January 20, 1957, while a resident of Montclair, New Jersey. Her will, which was dated November 14, 1951, named her daughter, Elinor E. Palmer, and a friend, John A. Bennett, as executors and trustees. She had also executed a codicil to her will, which was dated February 10, 1956. Elinor E. Palmer was the natural-born child of the decedent. During the lifetime of the decedent and prior to the execution of decedent's will, her daughter Elinor legally adopted two minor children, Richard H. Palmer in 1930 and Maurine Palmer (now Hanley) in 1931.
Under the provisions of the will and codicil the testatrix left certain property to Maurine valued by the Inheritance Tax Bureau at $31,172.17, and certain other property to Richard valued at $36,672.17. These valuations are not in dispute.
The Transfer Inheritance Tax Bureau ruled that the bequests to Maurine and Richard, the adopted children of the decedent's daughter, were not entitled to be taxed at the rate of 1% pursuant to N.J.S.A. 54:34-2, subd. a, which is applicable to the transfer of property to "the issue of any child" of a decedent, and held that the bequests were taxable at the rate of 8% pursuant to N.J.S.A. 54:34-2, subd. d, which applies to the transfer of property to persons not otherwise classified. An appeal by the executors was taken to the Superior Court, Appellate Division, and, before hearing there, it was certified by this court on our own motion.
The appellants contend that the Transfer Inheritance Tax Act should be read in pari materia with the Adoption Act, L. 1953, c. 264, p. 1778 (N.J.S.A. 9:3-1 to 36); that when so read N.J.S.A. 54:34-2, subd. a of the Transfer Inheritance Tax Act, which speaks of "the issue of any
child" of the decedent, should be construed to include an adopted child of the decedent's daughter. The appellants argue further that any other construction would vitiate the legislative design to place adopted children on the same footing as natural children.
The Bureau contends that the Transfer Inheritance Tax Act should be strictly construed and that the provisions of the Adoption Act have no relevancy.
N.J.S.A. 54:34-2, subd. a of the Transfer Inheritance Tax Act provides in part:
"The transfer of property to a father, mother, grandparent, husband, wife, child or children of a decedent, or to any child or children adopted by the decedent in conformity with the laws of this state, or of any of the United States or of a foreign country, or the issue of any child or legally adopted child of a decedent, shall be taxed at the following rates:
On any amount in excess of $5,000 up to $50,000 . . . 1% * * *." (Italics supplied.)
N.J.S.A. 54:34-2, subd. d, which applies to persons not otherwise classified in the ...