Court Opinion

ID: 4589591
Source: CourtListenerOpinion
Date Created: 2020-11-20 18:44:32.167487+00
Date Added: 2024-06-11T07:50:18.250982
License: Public Domain

WILLIAM R. STEWART, MARY S. WITHERBEE AND SPOTSWOOD D. BOWERS, EXECUTORS AND TRUSTEES UNDER THE WILL OF LISPENARD STEWART, DECEASED, PETITIONERS, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.Stewart v. CommissionerDocket No. 45282.United States Board of Tax Appeals28 B.T.A. 256; 1933 BTA LEXIS 1151; June 1, 1933, Promulgated *1151 Spotswood D. Bowers, Esq., for the petitioners.  Frank T. Horner, Esq., for the respondent.  VAN FOSSAN *256  OPINION.  VAN FOSSAN: On January 31, 1933, report on the above styled case was promulgated (), concluding with the direction that decision be entered under Rule 50.  For brevity the findings of fact included in our former report are incorporated herein by reference.  Before entry of decision the respondent filed a motion asking, in effect, that the report be set aside and its conclusion of law reversed.  In support of the motion respondent cited the decision of the Supreme Court in . In the course of our former opinion, and essential to our conclusion therein, we held that the trustees under the trusts in question constituted an "adverse interest" with respect to the grantor.  In the cited case, , the power of revocation was placed in the grantor "and either one of the other two trustees or their successors." The Court observed that the trustee owes no duty to the beneficiary to resist*1152  alteration or revocation of the trust and that the case must be viewed as if the reserved right of revocation had been vested jointly in the grantor and a stranger to the trust.  Consequently, there being no adverse interest, it was held that the grantor was in control of the property and taxable on its income. In our judgment the conclusion of the Supreme Court is determinative of the issue in the instant case and requires us to reverse our former holding.  The Court observed that, "as pointed out in ), the same considerations as to ownership and control affect the power to impose a tax upon the transfer of the corpus and upon the income." The reasoning of the Court negatives any supporting effect of the cases relied on in our opinion.  Counsel for petitioner urges that the statements of the Supreme Court in , on which reliance is placed, are obiter.We do not so view them.  *257  But were it so, they blaze the trial that we should follow.  A careful study of the cited decision, and those referred to therein, leaves us with no doubt in our minds.  Respondent*1153  correctly included in the taxable estate the corpus of the four trusts.  Decision will be entered under Rule 50.