Court Opinion

ID: 4492715
Source: CourtListenerOpinion
Date Created: 2020-01-17 22:03:33.861879+00
Date Added: 2024-06-11T15:03:58.262274
License: Public Domain

Seawell,
dissenting: The trust instrument here under consideration provided that it should be irrevocable by the grantor, but that the trustee “hereby reserves unto itself the right and power to *737revoke * * * upon giving ten days written notice of its intention so to do ” to the grantor. The word “ reserves ” means to keep back or withhold; to exclude something from that which is granted. Certainly the trustee, the bank, had no power of revocation of the trust here involved except as the grantor therein gave it the power. Upon what imaginable reason could the trustee be interested in revocation ? If it desired to be relieved of its duties, it could resign its trusteeship without the revocation of the trust.
The grantor was a stockholder, a director and the president of the trustee. If at any time the grantor should desire a revocation of the trust it may reasonably be inferred that a word or intimation from him as maker of the trust to himself as president of the trustee would receive prompt audition and be considered by the trustee as nothing less than a command. To make the income taxable to the grantor the statute requires power lodged in some one, not a beneficiary, and the grantor (where the grantor has not the power alone) “ in conjunction ” to revest the title in the grantor. In the trust instrument this power is lodged in (1) the bank (the trustee) which is not a beneficiary, and (2) the grantor. The trustee can not revoke without giving written notice to the grantor. The manner of “ giving written notice ” is not provided for, and it must therefore be by the usual legal method, unless the grantor will accept the service in some other way. The grantor must, therefore, act in a negative, if not in a positive, manner. The power to revoke the instrument and revest the property in the grantor is present in the two, to wit, the bank and Valentine Bliss. The statute does not require, necessarily, positive action of both parties in which the power resides. The power to revest may be by the action of either, provided it is “ in conjunction ” with the other.
Moreover, the determination of the Commissioner is presumed to be correct. In this case the petitioner has not attempted, but has failed, to negative that which appears quite evident, to wit, that this peculiar power to revoke the trust instrument is given to one who is in fact the agent and tool of the grantor, and who is purposely designated in the instrument to provide facilities wihereby the grantor might be enabled to avoid tax.