Court Opinion

ID: 9450704
Source: CourtListenerOpinion
Date Created: 2023-08-04 16:55:42.723808+00
Date Added: 2024-06-11T17:32:25.572185
License: Public Domain

CASTLE, Circuit Judge
(dissenting).
I find myself unable to agree with the conclusion reached by Judge Duffy. His reliance upon the District Court’s statement that none of the perpetual care agreements used by Oak Woods contain language “clearly indicating the creation of a trust” is misplaced. The record discloses that the form of agreement in use from March 1, 1947 (Exhibit C) provides that Oak Woods:
“shall set apart the amount of said principal sum and shall forever hold the same, in trust, for investment, for the permanent improvement of and keeping up in good order said cemetery, and the sum so set apart shall never be diverted from such uses.
(a) In connection with the improvement of and keeping up in good order said cemetery, the Association shall cut and water the grass on said lot during the summer season, compost, seed and grade said lot every fifth year, if necessary, keep all graves on said lot level with the surrounding surface; * * (emphasis supplied)
And, the form of agreement in use since January 1, 1948 (Exhibit D) provides that Oak Woods:
“shall set apart the amount of said principal sum and shall hold such sum in trust, for investment, for the improvement of and the keeping up in good order of said lot and cemetery, as set forth in sub-paragraph (a) hereof, and shall never divert such sum from such uses:
(a) To the extent that the net income of such sum will permit (the income, less necessary expenditures of administering the trust, being deemed the net income) the Association shall on
Lot No. * * * Section * * Division * * * cut the grass on said lot during the summer season, compost, seed and grade said lot every fifth year, if necessary, keep all graves on said lot level with the surrounding surface, and may apply such portion of said income as it may deem advisable for the mainte*365nance, improvement and keeping up in good order said Cemetery; * *.
(b) Said sum may be commingled with other funds held by the Association for similar uses and the Association shall not be required to maintain a separate account with respect to said sum.” (emphasis supplied)
Since the funds so received in trust under these contracts were commingled by the taxpayer with the funds received under the other forms of agreement, and the dividends received were from investments made of the commingled funds, it is my opinion that the taxpayer failed to discharge its burden of establishing that it was the owner of the dividend income and entitled to the dividends received deduction.