Gallagher v. Smith, Civ. A. No. 12973.

Decision Date04 December 1953
Docket NumberCiv. A. No. 12973.
Citation119 F. Supp. 360
PartiesGALLAGHER v. SMITH et al.
CourtU.S. District Court — Eastern District of Pennsylvania

Herman J. Obert, Philadelphia, Pa., for plaintiff.

W. Wilson White, Philadelphia, Pa., Rodger Stuart, Washington, D. C., for defendants.

WELSH, District Judge.

In this action plaintiff has filed motions for summary judgment under Rule 56 and for judgment on the pleadings under Rule 12(c) and the defendant and intervenor have filed a motion for summary judgment.

The Commissioner of Internal Revenue assessed income tax deficiencies and interest thereon for each of the years 1943 through 1948 in the total amount of $490,748.38. This action was brought by plaintiff taxpayer to recover the sum of $3,600 which was paid on account of said deficiencies. The United States of America has intervened to set up the entire amount of the tax in dispute.

1. The trust created under and by the will of Edward A. Gallagher, deceased, provides inter alia: "I hereby devise, give and bequeath all of my estate, real and personal of whatsoever nature and wheresoever situated to my wife Immaculata, also called Lottie, and my attorney Louis Marion, Esquire as Trustees In Trust nevertheless to and for the following uses and purposes: A. To hold, invest, re-invest and to receive the income therefrom and distribute the same to my wife Immaculata also called Lottie, for her benefit, maintenance and support and that of all my children living with her at the time during the term or period of her natural life or as long as she shall remain unmarried."

If under the above-quoted provision of the trust the taxpayer, the widow of the deceased, is entitled to the entire net income to the exclusion of her twelve children she will be denied a refund of the money already paid and she will be liable for all of the assessed income tax deficiencies, but if she is entitled to only one-thirteenth share of the net income contrary conclusions will obtain.

2. We think a proper construction of the language above quoted justifies the conclusion that the widow is to receive the entire net income of the trust estate. The expression, for the benefit, maintenance and support of the beneficiary's children, is considered explanatory of the object of the gift and not as vesting any interest in the children. In re Cunningham's Estate, 340 Pa. 265, 16 A.2d 712.

3. The taxpayer's confirmation of release and disclaimer which renounced her right to the net income of the trust in...

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3 cases
  • Gallagher v. Smith
    • United States
    • U.S. Court of Appeals — Third Circuit
    • June 3, 1955
    ...was dismissed, and judgment was entered against the plaintiff on the counterclaim in the amount, including interest, of $550,034.57. 119 F.Supp. 360. The decision of the present case turns upon whether the adjudication by the Orphans' Court is to be given conclusive effect, taxwise, as to t......
  • Westerman v. Gilbert
    • United States
    • U.S. District Court — District of Rhode Island
    • December 30, 1953
    ...119 F. Supp. 355 ... Civ. No. 1542 ... United States District Court D. Rhode Island ... December ... Smith, Del., 87 A.2d 871 ...         Furthermore, it has been held that ... ...
  • Estate of Lanigan v. Comm'r of Internal Revenue
    • United States
    • U.S. Tax Court
    • December 15, 1965
    ...of William A. Landers, Sr., 38 T.C. 828 (1962); and Flitcroft v. Commissioner, 328 F.2d 449 (C.A. 9, 1964), reversing 39 T.C. 52 (1962). In Gallagher, the taxpayer, along with 12 of her children, was the beneficiary of a trust created by her husband's will, but under the will its language w......

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