Court Opinion

ID: 6918400
Source: CourtListenerOpinion
Date Created: 2022-07-23 22:51:17.304219+00
Date Added: 2024-06-11T16:06:43.700182
License: Public Domain

SWAN, Circuit Judge
(dissenting in part).
I agree with so much of my brother’s opinion as holds that plaintiff was wrongly taxed as to the trust referred to as Exhibit 6, and that the judgment should be vacated and the cause remanded. I agree also that on remand the trial court should decide “whether a consolidation of the two trusts [Exhibit 5 and Exhibit 6] was legally accomplished.”1 Apparently my brothers hold that this is the only issue to be considered on remand and that the special verdicts of the jury as to the remaining five trusts shall be allowed to stand and “a new judgment entered after the merger question has been decided upon the facts in accordance with this opinion.” With this part of the opinion I am unable to agree.
The question of fact submitted to the jury with respect to each of the trusts was: “Did Jonathan Holdeen possess such control over the property of the trusts mentioned below so that he be considered as substantially the owner of the trust properties for income tax purposes.” In a lengthy charge the jury was told that this was a “simple question,” that there were no disputed facts, that “The only thing, if there is any dispute, and it is a very narrow issue, is the inference that may be drawn from those facts.” The jury was told to turn first to the written documents “and see what powers the plaintiff here retained in these written documents.” By way of illustration the court referred to Exhibit C in which the trustor reserved the right to substitute a trustee. The jury was told that under this reservation he might substitute himself as the trustee; that the Government contends this was an indicia of owmership, but the plaintiff contends no such inference may be drawn because a settlor may validly make himself trustee of his own trust. No instruction was given to assist the jury to determine which contention to adopt. Similarly, as to the reservation of a right to increase or decrease the shares of income of the grandchildren beneficiaries the jury was told of the conflicting claims of the parties, but without instruction as to which was correct. When the judge turned to the acts and writings outside the trust instruments themselves, he likewise stated the conflicting contentions of the parties but gave no adequate instructions to enable the jury to choose intelligently between them. That the jury found the charge confusing is demonstrated by the long colloquy between Juror No. 5 and the court when the jury, after several hours of deliberation, returned to the courtroom and asked the court to answer several questions which were troubling them. Appellant’s Appendix, pp. 116a-131a. In my opinion the charge was of so little assistance to the jury that its answers to the question submitted should be disregarded and a new trial ordered as to each of the trusts.

. However, the relevance of such a decision seems doubtful if the statement in appellant’s Reply Brief is correct, namely, that the Exhibit 5 trust was not claimed by the Commissioner to have had any 1945 income and no income from it was included in his determination of deficiency.