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O''Hara v. Glaser

Decided: March 6, 1972.

MEREDITH H. O'HARA, EXECUTOR OF THE ESTATE OF MARY L. JOHNSTON, DECEASED, APPELLANT
v.
SIDNEY GLASER, ACTING DIRECTOR, DIVISION OF TAXATION, DEPARTMENT OF THE TREASURY, STATE OF NEW JERSEY, RESPONDENT



For reversal -- Chief Justice Weintraub and Justices Francis, Proctor, Hall, Schettino and Mountain. For reversal and remandment -- Justice Jacobs. The opinion of the Court was delivered by Francis, J. Jacobs, J. votes to reverse and remand for a full trial-type hearing in the Transfer Inheritance Tax Bureau. See Lyon v. Glaser, Francis

[60 NJ Page 240] Mary L. Johnston, an 86 year old spinster, died on July 14, 1969 in Miami, Florida, leaving an estate valued at $667,000, consisting almost entirely of bank accounts and securities. Based on a finding that Miss Johnston was a domiciliary of New Jersey at the time of her death, the Transfer Inheritance Tax Bureau declared that her estate was subject to tax under the transfer inheritance tax act. N.J.S.A. 54:34-1, subd. a. A substantial assessment followed

from which the executor appealed to the Appellate Division. The Appellate Division affirmed in an unreported opinion and this Court granted certification. 60 N.J. 193 (1971).

Miss Johnston was born in Malden, Massachusetts, and lived there for many years. In 1921 she purchased a two-family house in Westfield, New Jersey, and moved there with her parents; she was their only child. According to the depositions in the appendix, she came to Westfield to be near her first cousin, Mrs. Pearl O'Hara, to whom she had been very close since childhood. This first cousin was the mother of Meredith O'Hara, the executor, Gordon O'Hara and Clarice J. (O'Hara) Warner, who are the principal beneficiaries under Miss Johnston's will. These children grew up considering her their Aunt, and she was a second mother to them after their parents died. The close relationship continued until her death.

Commencing in 1921 Miss Johnston became employed as an accountant and bookkeeper for the family estate of a member of the New York bar. Apparently, she acquired expertise in tax matters, particularly inheritance tax, and in securities, and she was described as being in "tax work most of her life." It seems likely that her substantial assets, about which she seems to have been quite secretive, resulted from that expertise. After her retirement in 1948, her employer sent her a gratuitous monthly payment in lieu of pension, which was continued until she died.

After Miss Johnston's parents died she lived alone on the second floor of the two-family Westfield home. For many years she had rented the first floor apartment to personal friends whom she remembered in her will with a small legacy. Both before and after she left for Florida on May 4, 1969 she offered to sell them the house, but upon consideration they decided against the purchase. In the intervening years between 1921 and 1968 the O'Hara children remained in close contact with Miss Johnston. After Meredith's marriage she became fond of his wife and children. She assisted

him in the handling of his father's estate, and when she was hospitalized in 1967 for a cataract operation, Meredith's wife took her to the hospital and looked after her when she returned home. In 1968 Meredith and Gordon O'Hara and their families moved to Florida permanently. Knowing that she was alone they suggested that she come there also. She had spent a number of enjoyable vacations in Florida and had spoken of living there to a number of persons, including Meredith and Mrs. Haney, her first floor tenant.

Matters came to a head on March 15, 1969 when, following a fall at home, probably resulting from a fainting spell, she was taken to the Rahway Hospital. She was suffering from an ankle injury and generalized arteriosclerosis which made her mentally confused at times, and likewise produced some impairment of her legs. During the hospital stay, which lasted until March 27, Dr. Dean Gray, who took care of her, said she was generally mentally alert, a very demanding and self-reliant type person, and reclusive in nature. She had some lapses of recent memory, occasional forgetfulness, and nocturnal confusion common to an 85 year old person; but he considered her mentally competent. The doctor persuaded her to transfer to the Ashbrook Nursing Home in Scotch Plains until she recovered from her leg condition.

Dr. Gray saw her a number of times at the nursing home, and discussed the future with her. Meredith O'Hara and his sister also visited her there early in April and engaged in similar conversations. It was obvious that she could not continue to live alone in her second floor apartment. According to the doctor she decided to go to Florida to live where she would be near her only close relatives. He said she was a strong-minded woman, who demanded and received the Wall Street Journal daily, and took a keen interest in her investments, although she never disclosed the value of them; she made her own decisions, and when she concluded she did not want to live alone in Westfield any longer, it was his opinion that she intended to remain in Florida permanently. When her decision was reached, O'Hara and his wife

with the aid of Dr. John A. Broward, a Florida physician, made arrangements for her admission to a nursing home in that State.

While at the New Jersey nursing home Miss Johnston decided to have a will drawn and the services of a Westfield attorney were retained for the purpose. The will was drawn, reciting her Westfield address, and presented to her on May 3, 1969. Apparently she signed it on that day but after writing amendments in the margins. As a result it had to be retyped and, because she left for Florida the next day, it was sent to her there for re-execution. On May 3 she went to her house with Meredith and packed up her clothes, records, correspondence, family photographs, Christmas card lists and jewelry to take to Florida with her. She removed everything except the furniture, which was of little value (it was appraised at $95 after her death). She said good-bye to her tenants, the Haneys, and as Mrs. Haney said, it was quite apparent that she was leaving for good, and intended to establish her home in Florida.

On the morning of May 4 Meredith and his sister picked up Miss Johnston at the nursing home and drove to the airport; where after purchasing a one-way ticket, she and Meredith flew to Miami. On arrival they went to his home and after a short visit there she left all of her belongings except what she would need at the Snapper Creek Nursing Home in Miami where arrangements had been made for her. The records of the home show that group activity and physical therapy were recommended, and that she was sometimes confused and forgetful. She was allowed bathroom privileges and to "ad lib" in a wheel ...


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