Court Opinion

ID: 9450262
Source: CourtListenerOpinion
Date Created: 2023-08-04 16:40:43.428594+00
Date Added: 2024-06-11T17:32:13.795280
License: Public Domain

KALODNER, Circuit Judge
(dissenting).
I agree with the majority’s statement that “This case turns entirely upon whether it was this testator’s intention to restrict the power of invasion to providing money needed to maintain his sister in her accustomed manner of living”, but disagree with its conclusion that the testator did not have such an intention.
Whether a power of invasion will disqualify the remainder interest for purposes of the charitable deduction depends upon (1) the “terms of the power”, and (2) “the proper construction to be placed thereon by the law of the state which would have jurisdiction to construe the will or trust in question”.1
As the Tax Court declared,2 had the power of invasion been limited to “the support, maintenance, welfare and comfort of Mary, my said sister”, it would *492have pertained to her prior mode of living and thereby conformed with the ascertainable standard requirement. Estate of Wood v. Commissioner, 39 T.C. 919 (1963). We may also assume, without deciding, that had the power been solely limited to “any other purpose which my trustees shall deem expedient, necessary or desirable for the benefit or use of my said sister,” the charitable remainder would not have been deductible.
However, in the instant case, these two provisions, which standing alone would compel opposite results, appear in one sentence — the second sentence of the Fifth Clause of the will — and that makes it imperative to consider the impact of the preceding sentence of the Clause which declares the “desire and intent” of the testator on the score of invasion of principal in the following terms:—
“It is my desire and intent that any and all parts of my estate, as well principal as income, shall be available for the support, maintenance, welfare and comfort of my said sister, so that such principal and income may be applied thereto if occasion arises as herein set forth.”
In the instant case we must look to the law of Pennsylvania and apply the principles of construction which there prevail.
The applicable Pennsylvania rule was recently stated by Mr. Chief Justice Bell in Burleigh Estate, 405 Pa. 373, at page 376, 175 A.2d 838, at page 839 (1961) :
“It is now hornbook law (1) that the testator’s intent is the polestar and must prevail; and (2) that his intent must be gathered from a consideration of (a) all the language contained in the four corners of his will and (b) his scheme of distribution and (c) the circumstances surrounding him at the time he made his will and (d) the existing facts; and (3) that technical rules or canons of construction should be resorted to only if the language of the will is ambiguous or conflicting or the testator’s intent is for any reason uncertain: * *
In Wright’s Estate, 380 Pa. 106, at page 108, 110 A.2d 198 at page 199 (1955) it was said:
“In order to assist us in discovering the testator’s intention, as expressed in the four corners of his will, we may place ourselves in the testator’s armchair and consider the circumstances by which he was surrounded at the time. * * * ”
The taxpayer suggests, and I agree, that “putting oneself in the position of Testator, it is inconceivable that he intended the words in his will to mean anything more than that principal could be used only to assure that his sister could continue in her prior mode of living.” On the date of the execution of the will, testator was 87 years old and his sister was 80. Testator knew that his sister was a “homebody” not given to extravagances, and that she had ample funds, along with the income of the trust, to maintain her standard of living. Reading the “Fifth” clause in light of these facts it cannot reasonably be said that the testator intended to benefit his sister, beyond maintaining her accustomed mode of living, in any manner which might have dissipated funds which were to comprise the remainder interest in charity. It is apparent that the purpose of the power to invade corpus, which was available only when income was deemed “insufficient”, was to protect the testator’s sister from exigencies not immediately foreseeable at the time the will was executed.3 Such a power created “no uncei’tainty appreciably greater than the general uncertainty that attends human affairs.” This, the Supreme Court has said, is permissible. Ithaca Trust *493Company v. United States, 279 U.S. 151, 154, 49 S.Ct. 291, 73 L.Ed. 647 (1929).
The view expressed, as to the purpose of the power of invasion and its scope, is in fact supported by the majority’s conclusion that the testator “intended that his sister should want for nothing in the way of the usual necessities and amenities of a quiet and simple mode of living,” and that “subject to the discretion of the trustees, she would be able to satisfy any reasonable desire, the judgment of the trustees being relied upon to protect her and the estate against unreasonable, needless or improvident expenditures”. (Emphasis supplied).
Where safeguards are established in a will designed “to protect * * * the estate against unreasonable, needless or improvident expenditures” in executing the testator’s intent to permit invasion of capital to provide that a life tenant “should want for nothing in the way of the usual necessities and amenities of a quiet and simple mode of living” it cannot be said that there is lacking an ascertainable standard by which can be calculated with reasonable certainty the amount remainder charities will receive.
The two cases cited and relied upon by the majority in support of its holding are significantly inapposite on their facts. Thus, in Henslee v. Union Planters Bank and Trust Co., 335 U.S. 595, 69 S.Ct. 290, 93 L.Ed. 259 (1949), which the majority cited as “dealing with a somewhat similar case”, the testator’s mother was to receive a set monthly allowance plus “any portion of my estate, either in income or principal, for [her] pleasure, comfort and welfare”, and the will further provided that the “first object to be accomplished in the administration and management of my estate and this trust is to take care of and provide for my mother in such manner as she may desire and my executors and trustees are fully authorized and likewise directed to manage my estate primarily for this purpose.” (Emphasis supplied). Again, in Merchants National Bank of Boston v. Commissioner, 320 U.S. 256, 64 S.Ct. 108, 88 L.Ed. 35 (1943), the trustee was invested with the power to invade corpus for the “comfort, support, maintenance, and/or happiness of my said wife,” and was specifically instructed to “exercise its discretion with liberality to my said wife, and consider her welfare, comfort and happiness prior to claims of residuary beneficiaries under the trust.” (Emphasis supplied).
In both of these cases the testator made it clear that his intention was to benefit the life beneficiary, in all respects without limitation, prior to the charitable remainder. These factors sufficiently distinguish these cases from the instant case.4
There remains only this to be said.
The majority, after stating that “The testator was undoubtedly aware that the income from his $478,000 estate would almost certainly never prove insufficient for her maintenance if so limited”, said “One would be hard put to it to find any good reason for the power given to the trustees to invade principal to an unlimited amount, unless it was that the testator intended that the principal might be used for anything within reason that his sister might need or desire”. (Emphasis supplied).
The majority’s reference was to the phrase in the Fifth Clause “and any other purpose which my trustees shall deem expedient, necessary or desirable for the benefit or use of my sister”. Read in the context of the entire will and the circumstances surrounding its execution, i. e., the life-long standard of modest living of the sister; the fact that she was 80 years old when the will was executed; she “had money of her own”, and “the testator was undoubtedly aware that the income from his $478,000 would almost certainly never prove insufficient for her maintenance”, it can only be said that the scrivener of the will, in the *494• mooted phrase, merely “painted the lily” of the testamentary design.
I would reverse the Tax Court for the reason that the remainder interest in charity created by the will was so declared as to allow his estate a charitable deduction.

. Newton Trust Co. v. Commissioner, 160 F.2d 175, 179 (1 Cir. 1947); accord Strite v. McGinnes, 330 F.2d 234 (3 Cir. 1964).

. 22 CCH Tax Mem. 968.

. Cf. Lincoln Rochester Trust Co. v. McGowan, 217 F.2d 287 (2d Cir. 1954), where the testator provided for certain unusual circumstances, spelling out tlie emergencies which he had in mind. The court allowed tlie charitable deduction.

. A similar view of tliese cases was expressed in United States v. Powell, 307 F.2d 821 (10 Cir. 1962).