Case Name: William H. Blodgett, Tax Commissioner, vs. The Union and New Haven Trust Company, Administrator (Estate of Marguerite Stuart Trowbridge)
Court: Connecticut Supreme Court
Jurisdiction: Connecticut
Decision Date: 1930-03-31
Citations: 111 Conn. 165
Docket Number: 
Parties: William H. Blodgett, Tax Commissioner, vs. The Union and New Haven Trust Company, Administrator (Estate of Marguerite Stuart Trowbridge).
Judges: 
Reporter: Connecticut Reports
Volume: 111
Pages: 165–178

Head Matter:
William H. Blodgett, Tax Commissioner, vs. The Union and New Haven Trust Company, Administrator (Estate of Marguerite Stuart Trowbridge).
Third Judicial District, Bridgeport,
October Term, 1929.
Wheeler, C. J., Mahtbie, Haines, Hinman and Banks, Js.
Argued October 24th, 1929
decided March 31st, 1930.
Farwell Knapp, with whom, on the brief, was Benjamin W. Ailing, Attorney General, for the appellant (plaintiff).
J. Dwight Dana, with whom, on the brief, was Huntington T. Day, for the appellee (defendant).

Opinion:
Maltbie, J.
In July, 1919, a banking firm in London, England, bought for Mrs. Marguerite Stuart Trowbridge certain bonds and continued to hold them thereafter until her death. On July 14th, 1924, Mrs. Trowbridge wrote the firm a letter, as follows: "I wish the £30,500 Funding Loan that you hold for me to stand in my husband's name as well as in my own, so that, in the event of my dying suddenly, it may pass to him immediately without any legal formalities. My mother had the Hongkong & Shanghai shares (that you kept for her) put in her name and in mine; at her death they came to me without formalities of any sort. I should be much obliged if you would give this matter your earliest attention." Thereafter the firm held the bonds jointly in the names of Mrs. Trowbridge and her husband in accordance with the terms of the letter. Mrs. Trowbridge died intestate January 16th, 1928, domiciled in New Haven, and the defendant is administrator upon her estate. It filed a supplementary inventory including these bonds for the purpose of determining whether a succession tax was due upon them, stating in the inventory that it believed they had vested at her death in her husband and had been reduced to possession by him. The sole question we are asked in the reservation to answer is this: "Are the Bearer Bonds referred to in the supplementary inventory filed in the Probate Court by the administrator, Exhibit A, subject to the Connecticut Succession tax under the provisions of Chapter 149 of the Public Acts of 1925 as amended by Chapter 81 of the Public Acts of 1927, the law in effect at the date of the decedent's death?"
The parties are agreed that the letter of Mrs. Trow-bridge, with the consequent act of the banking firm thereon, was effective to create in her husband an immediate interest in the bonds, capable of ripening into an absolute ownership in him should he survive her, and we approach the case from that standpoint. The administrator proceeds in its argument upon the basis that they were held by a joint tenancy having the attributes of such a tenancy as those were recognized by the English common law. We never have looked with favor upon such a tenancy in this State, and while one could perhaps be created where a clear intent to do so is evidenced by a proper instrument, we seek to avoid the result wherever it can be done without doing violence to the plain intent of the parties. State Bank & Trust Co. v. Nolan, 103 Conn. 308, 317, 130 Atl. 483; Allen v. Almy, 87 Conn. 517, 524, 89 Atl. 205. Thus a gift to A and B, the survivor to take the whole absolutely, will be construed to give A and B estates in common with a right in the survivor to take the whole as a remainder interest. Houghton v. Brantingham, 86 Conn. 630, 636, 86 Atl. 664. Such estates are the most that the husband can claim in the bonds.
The statute referred to in the question reserved for our advice is printed in the footnote. This statute was not intended to apply to property given as was that involved in this case, where the right of survivorship is a separable estate though created contemporaneously with the gift for life, but rather to property where the right is attached by operation of law as an incident to the estate immediately given. While the early portion of it would perhaps be capable of a broader construction, that this was not the intent seems clear from the provision in the latter portion that such property should be taxed as though held by a tenancy in common with a devise or bequest by "such deceased tenant by the entirety or joint tenant" of his interest therein to the survivor. Such has been the application of the statute of New York from which the tax commissioner says our statute was virtually copied. Matter of Kane, 246 N. Y. 498, 159 N. E. 410; Matter of Dunn, 236 N. Y. 461, 141 N. E. 915; Matter of Lyon, 233 N. Y. 208, 135 N. E. 247. Such too has been the basis of the arguments of counsel on both sides before us.
There is another and very persuasive reason why the statute is not to be construed as applicable to such a situation as the one before us. As we have said, the most that Mr. Trowbridge can claim is that he was an owner of the bonds in common with his wife so long as both lived and at her death before his own he became full owner of them. During the life estate he had a right of possession of them only equal to her own and a right to receive one half of the income of them. Pastine v. Altman, 93 Conn. 707, 716, 107 Atl. 803. The bonds being in her possession, through her agents, so long as she lived he could not, at least in the absence of special circumstances justifying interference in equity, take them into his own possession. Southworth v. Smith, 27 Conn. 355, 359. But he could not defeat Mrs. Trowbridge's right to receive one half the income, and this would be so even though he were in possession, for he would be obligated to account to her for her share. Lacon v. Davenport, 16 Conn. 331, 341; Barnum v. London, 25 Conn. 137, 151; Southworth v. Smith, supra, p. 358. At her death he became at once entitled to the full possession of the bonds, including the half interest she had owned in them, and to the enjoyment of the right to the income from that half which before had been hers. Ever since 1915 our statutes have contained a provision that all property of such a nature as these bonds "of any decedent which shall pass by deed, grant or gift, . . . intended to take effect in possession or enjoyment at the death of such grantor or donor, shall be liable to a tax as hereinafter provided." Public Acts of 1915, Chap. 332, § 3; General Statutes, § 1261; Public Acts of 1919, Chap. 115; Public Acts of 1923, Chap. 190, § 1. The situation before us falls fully within the express terms of the last clause of the statute. Coolidge v. Commissioner of Corporations & Taxation (Mass.) 167 N. E. 757; Wright v. Blakeslee, 101 U. S. 174, 176; Matter of Orvis, 223 N. Y. 1, 6, 119 N. E. 88; Estate of Felton, 176 Cal. 663, 169 Pac. 343; In re Huggins, 96 N. J. Eq. 275, 125 Atl. 27, 29, affirmed, as Fairleigh v. Bugbie, 103 N. J. L. 182,130 Atl. 923, 134 id. 917. This provision of the statute does indeed mark a departure from the strict nature of a succession tax, that is, a tax imposed upon the right to succession to property at the death of its owner; Silberman v. Blodgett, 105 Conn. 192, 201, 134 Atl. 778; for here the right which is taxed is not created by death but only ripens into possession or enjoyment upon the occurrence of that event. There is, however, no question of the right of the legislature to impose such a tax if it sees fit to do so. Blodgett v. Union & New Haven Trust Co., 97 Conn. 405, 407, 410, 116 Atl. 908; Keeney v. New York, 222 U. S. 525, 32 Sup. Ct. 105; Saltonstall v. Saltonstall, 276 U. S. 260, 48 Sup. Ct. 225; Coolidge v. Commissioner of Corporations & Taxation, supra; Marble v. Treasurer & Receiver General, 245 Mass. 504, 508, 139 N. E. 442; Matter of Wendel, 223 N. Y. 433, 442, 119 N. E. 879; Matter of Keeney, 194 N. Y. 281, 285, 87 N. E. 428; Matter of Brandreth, 169 N. Y. 437, 440, 62 N. E. 563. It follows that such an interest as Mr. Trow-bridge acquired in the bonds at the death of his wife is taxable under the provisions of § 1261 of the General Statutes as amended. There would then be no necessity of the enactment of the Public Act of 1925 to make it taxable, and the intent of that Act must be sought in some other purpose.
The defendant's contention that no tax is due is necessarily based upon an assumption that we have before us a true joint tenancy, and the applicability of the statute has 'been argued, and properly, from the standpoint of that assumption. On the other hand, the plaintiff, while recognizing that the facts may not establish such a tenancy, with equal propriety has argued his case upon the same assumption. Our conclusion that the facts do not show such a tenancy, makes it unnecessary to determine the effect of the statute.
As the question in the reservation is limited to the application to the situation before us of this Act, we must answer it in the negative.
No costs will be taxed in this court to either party.
In this opinion Haines and Hinman, Js., concurred.
Any property, real or personal, held in the joint names of two or more persons or by tenants by the entirety, or deposited in banks or other institutions or depositories in the joint names of two or more persons and payable to either or to the survivor, shall, upon the death of any such person, be subject to the tax imposed by the provisions of Chapter 190 of the Public Acts of 1923, as amended, in the same manner as though all of such property had been owned by such parties as tenants in common and the interest of such deceased person had been devised or bequeathed by such deceased tenant by the entirety or joint tenant by will to the surviving tenant by the entirety, joint tenant or tenants or person or persons in equal shares. The provisions of this act shall not apply to a joint checking or savings account in any bank, nor shall they apply either to real estate or to tangible personal property situated without this State.