Goldmann, Kilkenny and Carton. The opinion of the court was delivered by Carton, J.A.D.
Challenged on this appeal is a determination by the Transfer Inheritance Tax Bureau that the estate of Maria McIlvaine Gillmore, who died at a nursing home in Summit, New Jersey, on January 12, 1965 was subject to a transfer inheritance tax. The Bureau defends the imposition of the tax on the basis that decedent was a resident of this State within the meaning of the Transfer Inheritance Tax Act (N.J.S.A. 54:34-1 et seq.).
Appellants are her brother, Francis S. McIlvaine, and Chemical Bank New York Trust Company, executors of decedent's will which has been admitted to probate in New York. McIlvaine and his family are the principal beneficiaries under that will. They contend that Mrs. Gillmore was incompetent by reason of senility when she departed from New York in 1963 and never surrendered or lost her domicile in that state so as to subject her estate to taxation by New Jersey. In this connection we note that an estate tax of $17,000 has been paid by appellants to the State of New York.
The factual genesis of the present controversy is quite clear. Early in April 1963 Mrs. Gillmore's practical nurse, Mae Scharf, telephoned Francis McIlvaine from decedent's apartment at 124 East 84th Street, New York City, to advise that she could not adequately take care of her. In response to the telephone call Francis drove to New York on April 14, 1963 and took his sister to his home at Summit, New Jersey. Francis was her closest living relative and her sole next of kin. On April 30 decedent was placed in the Evergreen Nursing and Convalescent Home in Summit where
she remained until her death in 1965. Shortly after taking his sister to Summit, Francis arranged, during the summer of 1963, for the removal of the furniture from her New York apartment and the payment of the rent for the lease expiring on September 30.
In July 1963 Francis filed a verified complaint in the Superior Court, Chancery Division (Union County), seeking to have his sister adjudged a mental incompetent and requesting the grant of letters of guardianship to him. In that complaint he stated that he was domiciled and had his residence at 264 Oak Ridge Avenue, Summit. After averring that he was the brother of decedent, whom he described as "domiciled and who has had her address at 264 Oak Ridge Avenue, Summit" and "is presently residing at the Evergreen Nursing Home, Evergreen Road, Summit," the complaint recited that decedent had been a widow since 1912; there were no children of her marriage; her mother and father were dead; she had no brothers or sisters other than plaintiff, and she owned no real property but had a checking account in the Chemical Bank New York Trust Company with an approximate balance of $1300, as well as a custodian account in the same bank with an approximate market value of $350,000.
At a hearing in the incompetency proceeding held on August 20, 1963 plaintiff's medical witness expressed the opinion that decedent was mentally incompetent by reason of cerebral arteriosclerosis and/or senility; she was incapable of taking care of herself or her property; her prognosis was poor and her condition incurable. Francis testified that he lived in Summit and further stated that she resided with him in Summit prior to her entering the nursing home. Later in the hearing the following transpired:
Q. Mr. MacIlvaine [sic], how long was your sister living with you in Summit? A. Two or three weeks.
MR. DRUMMOND [Francis McIlvaine's attorney]: She had had an apartment, your Honor. She gave it up because she was losing all -- with the loss of memory she moved in with her brother in
Summit and then the condition got worse and then she was placed into the nursing home.
THE COURT: Only been here two or three weeks?
THE COURT: She has her domicile in New Jersey?
An order was entered in the Chancery Division on August 26, 1963 adjudging decedent incompetent and appointing her brother guardian of her person and property. He duly qualified. Pursuant to an order of the court, the Trust Company of Morris County accepted for deposit the securities in the New York custodian account.
On the basis of the foregoing the Transfer Inheritance Tax Bureau determined that decedent was a domiciliary of New Jersey. A payment of $62,562 on account of any tax due was received on January 6, 1966. Apparently prompted by appellant's protest as to the finding that decedent was a New Jersey domiciliary, the Bureau took the testimony of Francis McIlvaine and his wife Irene on April 27, 1966 on this subject. The testimony at that hearing will be commented on hereafter.
On August 31, 1966 the Bureau sent appellants a final statement of the amount of tax found due, along with a detailed statement outlining the basis of the Bureau's determination. This appeal followed.
The Bureau supports the validity of the assessment on two theories: (1) an inheritance tax can be assessed against the transfer of decedent's intangible assets as a resident of this State, although not domiciled here, and (2) such a tax can be assessed because decedent was actually domiciled here.
The argument that residence alone will support the tax is based upon the provision of N.J.S.A. 54:34-1, which authorizes the imposition of a tax upon the transfer of real or intangible personal property wherever situated where the transfer is from a ...