Court Opinion

ID: 4479631
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:13:47.12984+00
Date Added: 2024-06-11T14:52:50.408422
License: Public Domain

Mukdock, /., dissenting: I feel that the principles laid down by the Supreme Court in Lyeth v. Hoey, 305 U. S. 188, and followed in the Estate of John Sage, 42 B. T. A. 1304; affd., 122 Fed. (2d) 480; certiorari denied, 314 U. S. 699, and Charlotte Keller, 41 B. T. A. 478, are controlling here, so that the estate is entitled to deduct the net amount which Lafayette College received. The Supreme Court in the Lyeth case said: “In exempting from the income tax the value of property acquired by ‘bequest, devise, or inheritance,’ Congress used comprehensive terms embracing all acquisitions in the devolution of the decedent’s estate.” Here the question is whether the amount which Lafayette College received represented “bequests, legacies, devises or transfers.” There is reason to believe that these latter statutory words were also used comprehensively. Cf. Estate of John Sage, supra. The Lyeth case was different from this one in two respects. First, it dealt with an income tax question, whereas the estate tax is involved here; and, second, Lyeth, an heir, was a possible taker by intestacy, whereas Lafayette College was a possible'taker under a prior will. But in the Sage case the Lyeth principle was applied to an estate tax question similar to the present one, and in the Keller case it was applied even though Keller, like Lafayette College, had as her only claim the fact that she was named in a prior will and, unlike Lyeth, was not an heir. In the present case, as in the Keller case, a person who would have taken nothing if the later will had been uncontested, contested that will because named in a prior will and acquired a part of the decedent’s estate in the settlement, which also allowed the later will to go to probate. In all four of the cases the taker would have lost had the will gone uncontested, but each had a claim to a portion of the decedent’s estate in opposition to the contested will which was successfully pressed and settled through an agreement under which each received part of the estate. In all three of these decided cases it was held that property was acquired from the decedent. Here, too, I think Lafayette College took from the decedent, and not by purchase as is held in the majority opinion. I recognize that the-. law of Pennsylvania governs the rights of Lafayette College and its-acquisition of the property and under that law a bequest to charity based on a will made within thirty days of the death of the testator is void. But I think that Lafayette College acquired something in the devolution of the estate of this decedent. I do not think that any of the Pennsylvania cases cited in the majority opinion lead to a contrary result. In most, if not all, of those cases the court passed upon the validity of a bequest to charity involving a will executed within thirty days of the death of the decedent. Here, Lafayette College was not contending against the Pennsylvania rule and there was never any necessity for a decision as to its applicability. Lafayette College was contending that the entire 1939 will should be rejected because the testator lacked testamentary capacity at the time he executed it. Lafayette College did not need to rely upon the 1939 will. Its claim was based upon a prior will. Therefore it can not properly be said in this case that Lafayette College was allowed to take under a void bequest. It took under a settlement agreement settling rival claims under two different wills. A real dispute was settled by all of the parties in interest. The question of whether or not Lafayette College was “out” under the 1939 will or “in” under the 1938 will was never decided. The agreement was that the contest would be discontinued permanently and the residuary estate would go to Lafayette College. The probate court having jurisdiction made ah adjudication on an account filed by the executor under which the residuary estate was distributed to Lafayette College. The court in that adjudication expressly stated that consideration of the application of the Pennsylvania law as to the validity of a charitable remainder was not necessary in view of the agreement. Since a distribution was actually made to Lafayette College in administering the estate of this decedent, with the full approval of the court following the settlement of a genuine will contest, it seems incorrect to say that the College took by purchase rather than in a devolution of the decedent’s estate. Sternhagen, Black, Harron, and Opfer, /•/., agree with this dissent.