Estate of Mervin G. Pierpont, Deceased, Union Trust Company of Maryland and Ernest L. Poyner, Executors v. Commissioner of Internal Revenue , 336 F.2d 277 ( 1964 )

ALBERT V. BRYAN, Circuit Judge

(dissenting):

Actually, denial of the marital exemption by the Tax Court — and the tax assessment of $31,697.63 — rests upon the mere omission of the word, “estate” from the clauses in the will creating the power of appointment. Neither the tax statute nor the Maryland decisions are so exacting in their requirements of a power to appoint to the donee’s estate. No more is demanded than that the right be expressed. In my judgment the will contains the requisite expression.

The just and scrupulously objective statement of the factjs in the opinion of the Court demonstrates the point of my disagreement. In forceful articulation the will — even down to plagiarizing the very phraseology of the Tax Code — manifests that the pertinent marital deduction provisions of the statute were adopted, embraced and incorporated in their entirety. Obviously this includes a power of appointment, such as is contemplated by the statute, with every requisite element. The possible beneficiaries are unlimited — thus necessarily including the donee’s estate — by the will’s directions that the trust principal be paid over “in such manner and proportions as my wife may designate and appoint”. A more encompassing choice of appointees is not easily phrased. To say that, nevertheless, the testament’s power fails to comply — because it did not refer to “estate” eo nomine — is for me a captious and Pharisaical reading of the ultimate bequest or devise.

Besides, the decision of the Circuit Court of Baltimore City was not collusive in the sense that it was ex parte or by consent. It was non-adversary, but only so because the testator’s son and daughter-in-law, both defendants, did not oppose the executor’s construction, although a contrary determination would have advantaged them. Their failure to advance their position ought not to convert the suit into a “no-contest”. Hence under Freuler v. Helvering, 291 U.S. 35, 45, 54 S.Ct. 308, 78 L.Ed. 634 (1934), the interpretation of the State court bound the Tax Court.

But in my judgment neither this decree nor the testimony dehors the will emphasizing the testator’s aim need be considered. The testament itself plainly provides the donee power to name her estate as appointee. The Court of Appeals of Maryland, as the majority now fully points out, has several times passed upon the scope to be accorded a power of appointment. Never, however, has it excluded the estate of the donee as a potential nominee when the organic document clearly permits the estate to be a beneficiary.

In my view the Tax Court has been overcritical and puristic in collection of the sovereign’s death tallage. I would reverse.