DocketNumber： Docket No. 19809.
Citation Numbers： 18 B.T.A. 539, 1929 BTA LEXIS 2017
Judges： Sternhagen
Filed Date： 12/20/1929
Status： Precedential
Modified Date： 11/21/2020
*2017 An instrument authorizing a depository bank to pay to decedent's wife income from certain stocks of decedent which were to be transferred to her upon the happening of contingencies not shown to have occurred
*539 The petitioner attacks a determination by respondent of a deficiency of $64,991.50 in estate tax resulting from the inclusion of certain securities in the gross estate. Other issues were withdrawn. Respondent, by amended answer, claimed an addition to the gross estate of a parcel of real property.
FINDINGS OF FACT.
Frank G. Owen, the decedent, was a citizen and resident of Oregon. He died intestate June 26, 1922, and Leila S. Owen is the administratrix of the estate.
On April 27, 1920, decedent and Leila S. Owen executed the following documents:
THIS AGREEMENT made and entered into this 27th day of April, 1920, in triplicate between Frank G. Owen, first party, and Leila S. Owen, his wife, second party, WITNESSETH;
THAT the parties hereto*2018 do hereby create the FIRST NATIONAL BANK of Medford, Oregon, a trustee as herein provided, and do deposit with such trustee the following securities, to wit:
*540 Certificate No. 121, for 17,458 shares, of the par value of ONE ($1.00) DOLLAR each of the capital stock of VULCAN JARBIDGE MINING COMPANY, issued to Frank G. Owen July 16, 1913.
Certificate No. 98, for 20 shares, of the par value of ONE HUNDRED ($100.00) DOLLARS each of the capital stock of MOUNTAIN POWER COMPANY, issued to Frank G. Owen November 19, 1918.
Certificate No. 12, for 600 shares of the par value of ONE HUNDRED ($100.00) DOLLARS each of the capital stock of JOHN S. OWEN COMPANY, issued to Frank G. Owen, September 17, 1915.
Certificate No. 77, for 293 11/16 shares of the capital stock of THREE STATES LUMBER COMPANY, of the par value of TEN ($10.00) DOLLARS each, issued to Frank G. Owen, February 2, 1915.
Certificate No. 486, for 100 shares of the capital stock of the DEL NORTE COMPANY, of the par value of ONE HUNDRED ($100.00) DOLLARS each, issued to Frank G. Owen, May 27, 1914.
Certificate No. 393, for 200 shares of the capital stock of the DEL NORTE COMPANY, of the par value of ONE HUNDRED*2019 ($100.00) DOLLARS each, issued to Frank G. Owen, April 19, 1910.
Certificate No. 57, for 152 shares of the capital stock of the JOHN S. OWEN LUMBER COMPANY, of the par value of ONE HUNDRED ($100.00) DOLLARS each, issued to Frank G. Owen, January 29, 1915.
Certificate No. 52, for 62 1/2 shares of the capital stock of the RUST LAND AND LUMBER COMPANY, of the par value of ONE HUNDRED ($100.00) DOLLARS each, issued to Frank G. Owen, June 3, 1914.
Certificate No. 53, for 31 1/4 shares of the capital stock of RUST LAND AND LUMBER COMPANY, of the par value of ONE HUNDRED ($100.00) DOLLARS each, issued to Frank G. Owen, February 2, 1915.
Trustee Certificate No. 25, for 32 shares of stock of the RUST-OWEN LUMBER COMPANY, of the par value of ONE HUNDRED ($100.00) DOLLARS each, issued to Frank G. Owen, July 3, 1913.
Trustee Certificate No. 31, for stock of the RUST-OWEN LUMBER COMPANY for 51 shares of the stock of said Company, of the par value of ONE HUNDRED ($100.00) DOLLARS each, issued to Frank G. Owen, November 29, 1915.
Certificate No. 95 for 15 1/8 shares of the capital stock of RUST-OWEN LUMBER COMPANY, of the par value of ONE HUNDRED ($100.00) DOLLARS each, issued to*2020 Frank G. Owen, February 26, 1913.
Said Bank as such trustee shall hold said securities for a period of one (1) year from this date, during which period it shall collect all dividends and all moneys paid in the distribution of capital assets, and all moneys accruing from any other source upon said certificates, and as the said funds are received, pass the same to the bank accounts in said bank of the parties hereto, as follows, to wit:
Of the moneys received on said Certificate No. 121 Vulcan Jarbidge Mining Company, credit to the said account of Frank G. Owen such income on 4.979 shares, and credit to the account of said Leila S. Owen the income upon the balance, 12,479 shares.
From such income from Certificate No. 98, Mountain Power Company, credit to said account to Frank G. Owen the income on ten (10) shares, and credit to the account of said Leila S. Owen the income on ten (10) shares.
From such income from Certificate No. 12 of the John S. Owen Company, credit said account of said Frank G. Owen, with the income on 25 *541 shares, and the account of said Leila S. Owen with the income on 575 shares.
From such income from Certificate No. 77, Three States Lumber*2021 Company, credit said account of said Frank G. Owen with the income from 23 35/64 shares, and said account of Leila S. Owen with the income from 270 9/64 shares.
From such income from Cretificate No. 486 of the Del Norte Company, credit the account of said Leila S. Owen with the entire income from said 100 shares.
From such income from Certificate No. 393 of said Del Norte Company, credit said account of said Frank G. Owen with the income from 70 1/2 shares and said account of Leila S. Owen with the income from 129 1/2 shares.
From such income from Certificate No. 57, John S. Owen Company, credit said account of said Frank G. Owen with the income from 68 1/2 shares and said account of Leila S. Owen with the income from 83 1/2 shares.
From such income from Certificate No. 52 of Rust Land and Lumber Company, credit the entire income from said 62 1/2 shares to said account of said Leila S. Owen.
From such income from said Certificate No. 53 of said Rust Land and Lumber Company, credit the said account of Frank G. Owen with the income from 8 shares, and the account of said Leila S. Owen with the income from 23 1/4 shares.
From such income from said Trustee Certificate*2022 No. 25, Rust-Owen Lumber Company, credit the entire income from said 32 shares to the account of said Leila S. Owen.
From such income from said Trustee Certificate No. 31 of said Rust-Owen Lumber Company, credit the entire income from said 51 shares to the account of said Leila S. Owen.
From such income from Certificate No 95, Rust-Owen Lumber Company, credit the income from 8 5/8 shares to the account of said Frank G. Owen, and credit the account of said Leila S. Owen with the income from 6 1/2 shares.
Whatever money shall be due the Trustee for the handling of this matter shall be deducted from the collections as made. At the expiration of one year from this date the said Trustee shall make such disposition of said Certificates and all of them as shall be mutually agreed upon by the parties hereto. Should they fail to make such agreement within thirty (30) days after the expiration of one year from this date the said Trustee shall cause the several corporations out of which the said certificates are issued to issue certificates for the following number of shares to the parties hereto, respectively, as follows, to wit:
| Frank G. Owen | Leila S. Owen | |
| Out of Certificate No. 121, Vulcan | ||
| Jarbidge Mining Company, to | 4,279 shares | 12,479 shares. |
| Out of Certificate No. 98, Mountain | ||
| Power Company | 10 shares | 10 shares. |
| Out of Certificate No. 12, John S. Owen Co. | 25 shares | 575 shares. |
| Out of Certificate No. 77, Three States | ||
| Lumber Co | 23 35/64 shares | 270 9/64 shares. |
| Out of Certificate No. 486, The Del Norte | ||
| Company | 100 shares. | |
| Out of Certificate No. 393, The Del Norte | ||
| Company | 70 1/2 shares | 129 1/2 shares. |
| Out of Certificate No. 57, John S. Owen | ||
| Lumber Co | 68 1/2 shares | 83 1/2 shares. |
| Out of Certificate No. 52, Rust Land & | ||
| Lumber Co | 62 1/2 shares. | |
| Out of Certificate No. 53, Rust Land & | ||
| Lumber Co | 8 shares | 23 1/4 shares. |
| Out of Trustee Certificate 25 Rust-Owen | ||
| Lumber Company | 32 shares. | |
| Out of Trustee Certificate 31 Rust-Owen | ||
| Lumber Company | 51 shares. | |
| Out of Certificate No. 95, Rust-Owen | ||
| Lumber Company | 8 5/8 shares | 6 1/2 shares. |
*2023 *542 All of the certificates deposited herewith are assigned by said Frank G. Owen in blank. In those instances in which the entire certificate under this distribution goes to the second party authority is given said trustee to so write in the name of Leila S. Owen as assignee in lieu of surrendering this certificate and issuance of a new one if she should so prefer. Should the said certificates be distributed between the respective parties hereto as herein provided, then said Bank has authority to surrender the original certificates herewith submitted and cause new certificates to be issued to the respective parties as herein provided, and shall promptly procure such new certificates and hold them subject to the order of the parties respectively entitled thereto as their interests are herein shown. On the other hand if at the expiration of one year from this date or within the thirty days immediately following the parties should give direction to said Trustee in writing for any other or different disposition of said certificates said Trustee shall make such distribution accordingly.
In WITNESS WHEREOF the parties hereto have set their hands and affixed their seals this*2024 27th day of April, 1920.
FRANK G. OWEN [SEAL.]
LEILA S. OWEN [SEAL.]
Done in the presence of:
VERA MERRIMAN.
The Undersigned, the above-named Trustee, does hereby accept the trust above mentioned and does hereby receipt for the securities mentioned therein.
FIRST NATIONAL BANK of Medford, Oregon,
By WM. G. TAIT,
MAY 23rd, 1921.
DEAR SIR: Pursuant to the terms of a Trust Agreement between Frank G. Owen and Leila S. Owen of date of April 27th, 1920, we hereby give you formal notice of our desire that the same shall be in effect and continued for the further period of one year.
Notice will be sent all Companies whose stock is covered by the Trust Agreement of our desire for the continuation of the Agreement for the further period.
Yours very truly
FRANK G. OWEN
LEILA S. OWEN
APRIL 15th, 1922.
DEAR SIR: Pursuant to an Agreement between Frank G. Owen and Leila S. Owen dated April 27th, 1920, and in which the First National Bank is acting as*2025 trustee, we hereby give formal notice of our desire that the same shall be continued in effect for the further period of one year from April 27th, 1922.
*543 Due notice will be sent all Companies whose stock is covered by the above Agreement.
Kindly sign and return the two enclosed copies.
Yours very truly,
FRANK G. OWEN
LEILA S. OWEN
MEDFORD, OREGON,
Received from the First National Bank of Medford, Oregon, all of the securities listed and named in the within Trust Agreement.
LEILA S. OWEN
THIS AGREEMENT made this 27th day of April, 1920, between FRANK G. OWEN, first party, and LEILA S. OWEN, second party, WITNESSETH:
That the parties hereto have this day mutually settled their property interests, as follows: The first party has executed and deposited in escrow with the FIRST NATIONAL BANK of Medford, Oregon, a deed to the home property of the parties hereto, and which deed is meant to cut off all right of courtesy of the first party in said property, which deed the second party may, if she elects to do so, have delivered to her by said Bank at any time within*2026 the thirty day period immediately following the expiration of one year from this date. With said title shall pass the title to all of the house hold furniture and equipment in said home, excepting such furniture and property as formerly belonged to Cora M. Owen, the Mother of the first party, and except such office furniture and equipment as is on said premises.
And as a part of said property settlement the parties hereto have this day mutually executed and deposited with the First National Bank at Medford, Oregon, their trustee agreement in which they have deposited certain securities therein mentioned, which shall and do belong to the respective parties hereto in the proportions as therein designated, unless other distribution thereof shall be made within the time and as in said trustee agreement provided.
The parties hereto have determined to live apart for the period of one year from this date. Neither party shall be deemed guilty of desertion by reason of such separation. There is no agreement between the parties for the procurement of a divorce. Such separation for such period is agreed upon to permit the second party hereto to determine from the conduct of the first*2027 party during said period of one year whether she will then renew the relationship of husband and wife between the parties, or whether she will proceed with the procurement of a divorce. In the event of her electing to so procure the divorce the property interests of the respective parties are settled as herein provided. They may at the expiration of one year and in the event that they do not renew the relationship of husband and wife, make some mutual modification in the distribution of the securities mentioned in the Trustee Agreement. But in the absence of such mutual agreement the property settlement shall stand as made herein and as made in said Trustee Agreement.
And in consideration of the premises the first party further undertakes and agrees that if, during said period of one year following the execution of this instrument, the part of the income provided for in the said Trustee Agreement *544 to be received by the second party shall be insufficient to fully meet her financial requirements according to her station in life, he will from time to time as additional funds become necessary, supply the same to the credit of the account of the second party in said First*2028 National Bank.
And it is mutually agreed that if at any time before the distribution of said assets as provided for in said Trustee Agreement the value of the securities listed therein should become so impaired as to render the portion thereof provided by said Trust Agreement to be distributed to the second party hereto as inadequate for her support then at the time of such distribution there shall be such readjustment as to adequately provide for the support and maintenance of the second party and the two children of the parties hereto. The second party must be the judge at the expiration of one year from this date as to whether the parties shall renew the relationship of husband and wife.
IN WITNESS WHEREOF the parties have hereunto set their hands and affixed their seals this 27th day of April, 1920.
FRANK G. OWEN [SEAL.]
LEILA S. OWEN [SEAL.]
Done in Presence of:
VERA MERRIMAN
On April 27, 1920, decedent, by separate letters, notified the Rust-Owen Lumber Co., John S. Owen Co., Three States Lumber Co., Rust Land & Lumber Co., Del Norte Co., and John S. Owen Lumber Co. that he had deposited the certificates of stock in such companies, which were*2029 listed in the foregoing trust agreement, assigned in blank, to the First National Bank of Medford, Oreg., and directed each company to pay all income thereon to the bank until further instructions.
On April 27, 1920, decedent executed a deed of conveyance to Leila S. Owen, his wife, of certain described real property. The value of this property at the date of decedent's death was $15,000. The deed was recorded August 21, 1922.
OPINION.
STERNHAGEN: Neither from the evidence nor from respondent's notice of deficiency attached to the petition does it appear clearly what property petitioner returned as part of the gross estate, what property respondent added in determining the deficiency, or what of such property the petitioner now seeks to have excluded from the gross estate. The prayer of the petition is that the Board hold certain shares to belong to decedent at death. But this does not reflect the issue, since petitioner is obviously seeking the exclusion of certain other property which respondent has apparently refused to exclude. More specifically, it is not clear whether petitioner seeks to exclude all the securities first listed in the trust agreement or only those*2030 later listed in the agreement, the income from which was to be paid to the wife.
*545 But our conclusion is perhaps broad enough to dispose of the issue in either scope; for if respondent has included the latter securities, as the arguments of counsel seem to imply, he manifestly has included all.
From the evidence it may be inferred that the decedent owned all the securities up until April 27, 1920, when the agreement were made. The certificates were in his name, and the wife's statement that "he took the position that the property belonged to us equally" is not demonstrative of her ownership, nor is a vague statement of the lawyer who drew the agreement of any probative force. On that date, decedent did not transfer ownership of the property. He merely deposited the property with the bank and ordered the income distributed as agreed. The wife received an assurance of income for a year and the expectation of ownership in the future upon certain conditions. This is all she had on April 27, 1920, and she received no more before decedent's death. It has not been shown how the securities were treated in the testamentary proceeding. Were they included in the inventory*2031 of the estate? We assume they were. There is not in this record sufficient to establish that they were not part of his gross estate and we sustain the respondent in including them.
As to the real property, the respondent appears to have excluded it from the gross estate when the deficiency was determined. By an affirmative allegation in his answer he pleaded the right now to include it. We think he has not established his claim. The deed was executed on April 27, 1920. Nothing more has been proven about the ownership than this, and hence it can not be said that the property was owned by decedent when he died. The deficiency should therefore not be increased on this account.