Court Opinion

ID: 4496372
Source: CourtListenerOpinion
Date Created: 2020-01-23 18:14:49.581509+00
Date Added: 2024-06-11T15:04:10.625567
License: Public Domain

Leech,
dissenting: The necessary premise of the majority opinion is that Jonathan Peterson retained a right to the purported gifts after they were made. Supplementing the statement of Member Murdock, with which I agree, the only direct evidence in the record on that point is the statement of the donee. She denies the existence of that retained right — not vaguely but categorically. Her testimony is neither contradicted nor discredited. The fact that the money for the gifts was borrowed does not seem to me to do so. Not only that, but, contrary to the situation existing in the case of F. Coit Johnson, 33 B. T. A. 1003; affd., 86 Fed. (2d) 710, upon the authority of which the majority opinion is largely supported, and contrary to the view expressed in the prevailing opinion here, the purposes of the present trusts were not for the benefit of Jonathan Peterson, except in so far as they relieved him of his legal obligations. Obviously, such obligations did not include the support of his sisters nor his competent children then of age, the provisions for which third parties were not even limited, by the trust, to Peterson’s life. Likewise, differentiating the facts in this case from those in the Johnson case, the trusts here did not limit the trust in its use of the funds to a loan to Peterson.
At most, it seems to me this record discloses that Jonathan Peterson gave his wife these gifts, unconditionally, relying on the return of them to him as loans, not upon any agreement of his wife, but wholly upon her doing so in the exercise of her absolute discretion. Such reliance does not establish the essential retained right of Peterson to the gifts when made, which, alone, defeats them as completed gifts. As stated another way by the Second Circuit Court of Appeals in the Johnson case, supra:
* * * The distinction, though often hard to detect in fact, is perfectly clear in principle between creating rights which you trust will not be exercised and creating no legal right at all; a transaction of the first kind changes existing legal relations between the parties, the other does not. * * *
Smith, Arundell, and Tyson agree with the above dissent.