Goldmann, Kolovsky and Carton. The opinion of the court was delivered by Carton, J.A.D.
Plaintiff, executor of the estate of his late wife Margaret B. Cross, challenges a final determination of the New Jersey Transfer Inheritance Tax Bureau, directing an assessment, pursuant to N.J.S.A. 54:34-1(f), on a one-half interest in two purchase money mortgages. Plaintiff has paid under protest the amount of the assessment of $4,661.06 and interest, accrued at 10% per annum, amounting to $1,154.40.
Mrs. Cross died in 1965. In the transfer inheritance tax return for her estate the executor listed two mortgages, both held jointly in the names of decedent and her husband, on properties known as Longbridge Farm and Lloyd Farm. (Two joint bank accounts were also declared but are not involved in this appeal.) Although the executor attributed no market value to the decedent's interest in the mortgages, the
Bureau disagreed and determined market values of $104,333.29 and $58,629.40 for the Longbridge Farm and Lloyd Farm mortgages, respectively.
As in the case of all other property held under joint tenancy, decedent's interest in these mortgages was subject to tax under the Transfer Inheritance Tax Act unless plaintiff, as surviving joint tenant, brought himself within the terms of the statutory exception by showing "to the satisfaction of the Director" that his wife's one-half interest "originally belonged to him * * * and never * * * belonged to the decedent." N.J.S.A. 54:34-1(f). We hold that plaintiff failed to do so and consequently the mortgages were properly included in the decedent's estate for tax purposes.
In 1948 and 1958 title to the Longbridge Farm and Lloyd Farm properties, respectively, vested in Mr. and Mrs. Cross as tenants by the entirety. In 1963 they sold these properties for $497,500, receiving 29% of the consideration in cash and the balance in the form of two promissory notes, payable to both of them. These notes were secured by purchase money mortgages in which the Crosses were both named as mortgagees.
By virtue of N.J.S.A. 46:2 D -1 the Crosses held title to the mortgages as joint tenants:
"When any mortgage, covering real estate or chattels or both, shall hereafter be made and executed to, or assigned to, any husband and wife, such mortgage shall be held by such husband and wife as joint tenants and not as tenants in common, both as to the legal estate and the beneficial interest or debt thereby secured, unless otherwise therein provided."
It is not argued that the parties "otherwise provided" so as to create a tenancy in common when the 1963 sale took place.*fn1 We observe, parenthetically, that our courts have held
that tenancies by the entirety may not exist in personalty. Central Trust Co. v. Street, 95 N.J. Eq. 278 (E. & A. 1923).
Consequently, it is clear that the two mortgages come within the purview of N.J.S.A. 54:34-1(f) dealing with taxable transfers unless they are brought ...