Baker-Boyer Nat. Bank v. Henricksen
| Decision Date | 29 September 1942 |
| Docket Number | No. 267.,267. |
| Citation | 46 F. Supp. 831 |
| Parties | BAKER-BOYER NAT. BANK v. HENRICKSEN et al. |
| Court | U.S. District Court — Western District of Washington |
Burns Poe and Elizabeth Shackleford, both of Tacoma, Wash., and Cameron Sherwood and Marvin Evans, both of Walla Walla, Wash., for plaintiff.
J. Charles Dennis, U. S. Atty., Harry Sager, Asst. U. S. Attorney, and Thomas R. Winter, Sp. Atty., Bureau of Internal Revenue, all of Seattle, Wash., for defendants.
The plaintiff executor seeks in this action a refund of about $23,000 of estate taxes and interest paid upon the estate of George T. Welch, deceased. The executor contends that the Commissioner of Internal Revenue incorrectly disallowed deductions approximating $170,000 from the return for concededly charitable bequests. The Commissioner's position is that under the will the widow was given power to invade and exhaust the corpus of such charitable bequests and that therefore they were not deductible. The executor takes the position that the will gave the widow no such power at all, and further that the construction of the will by a probate court of the State of Washington of general jurisdiction and also by the widow, which constructions denied her any such right, are conclusive.
George T. Welch, the decedent, a retired farmer of Walla Walla, Washington, died on April 15, 1937, at the age of ninety-five years, leaving surviving him his widow, Carrie Welch, then aged eighty-seven years; his son, Fred B. Welch, and his grandson, George B. Allen. He left an estate of $226,303.98, this being one-half of the community estate. Under the community property laws of the State of Washington the other one-half belonged to the widow.
Mr. Welch left a will dated in 1930 and a codicil dated in 1931. Under the will, as modified by the codicil, he made two cash bequests of $500 each, and gave, devised and bequeathed to his wife, Carrie Welch, a life estate in all the rest, residue and remainder of his estate. Subject to such life estate of Carrie Welch, he gave his son, Fred B. Welch, a life estate in $30,000 in cash or securities found in his estate, and also subject to the life estate of his wife, gave his undivided one-half interest in certain community real property to his said son "as his absolute estate". Likewise, subject to the life estate of Carrie Welch, as aforesaid, he gave his grandson, George B. Allen, a life estate of $12,500 in cash or securities as found in his estate. As to such $12,500 the will gave and bequeathed the remainder in trust for charitable use by the Board of Conference Claimants, Inc., of the Pacific Northwest Annual Conference, Methodist Episcopal Church. All the remainder of his estate, subject to the wife's life estate in all of same, as above, and subject to the son's second life estate as to such $30,000 and subject to the son's said absolute estate in said real property, was given, devised and bequeathed to the Baker-Boyer National Bank as Trustee for the concededly charitable purposes of providing education for boys and girls, providing support for the poor, aged and infirm, and erecting a home for the aged as a memorial to the testator and his wife.
The executor insists that the chief and paramount intention of George T. Welch in the making of his will and codicil, as evidenced thereby and as shown by the admitted testimony introduced at the trial, was to provide for the charities which the Commissioner rejected as the basis for deductions from the taxable net estate. The Commissioner concedes that such were and are charities and would be deductible except for what he contends was the authority for the widow under the fifth paragraph of the will to invade the corpus of said charitable bequests.
Paragraph V of the will gave, devised and bequeathed "unto my said wife, Carrie Welch, for and during her lifetime, should she survive me, all the rest, residue and remainder of my estate, both real and personal, including the rents, issues and profits therefrom, and of whatsoever the same may consist and wheresoever situated, with the distinct understanding that no limitation is placed on my said wife in any expenditures which she may make for any purpose, or any accounting be made thereof, with the then remainder over upon her death unto my Trustee, hereinafter named, in trust, nevertheless, for the uses and purposes hereinafter mentioned," to-wit: concededly charitable uses and purposes.
In the succeeding paragraphs of the will the testator a number of times used the words "subject to the life estate hereinbefore given, devised and bequeathed unto my said wife, Carrie Welch, in my estate, should she survive me, as aforesaid". Moreover, in paragraph IX of the will, which specifically sets forth the powers and duties of the charitable trustee, it is stated: "Subject to each and every of the foregoing provisions of this my Last Will and Testament, including the life estate in my said estate hereinbefore given, devised and bequeathed unto my said wife, Carrie Welch, should she survive me, I do hereby give, devise and bequeath all the rest, residue and remainder of my property * * * whether real, personal or mixed, * * * unto my said Trustee, The Baker-Boyer National Bank, of Walla Walla, Washington, to have and to hold the same, together with all the privileges and appurtenances thereunto belonging, and all income and profits arising therefrom, to my said Trustee, perpetually, in trust" for the charitable purposes specified. Said Paragraph IX specifically gives said charitable Trustee authority over "the identical securities, properties, or investments received by it from my estate, whether it be at my death or at the death of my said wife, Carrie Welch, should she survive me" and specifically authorizes it The aforesaid use in the will of the term "identical" is extremely significant.
While the will thus so expressly, positively and definitely gives the Trustee power to sell and use the principal and income, or either, of the trust estate, such instrument no where gives the said widow any express authority to sell, convert or dispose of any of the securities or other properties of the estate or any express authority to invade the principal or corpus of the estate in any manner whatsoever.
But the Commissioner contends that the language in said fifth paragraph, to-wit: "with the distinct understanding that no limitation is placed on my said wife in any expenditures which she may make for any purpose, or any accounting be made thereof, with the then remainder over upon her death unto my Trustee," does by necessary implication give her such authority to invade the corpus of such charitable bequests to the Trustee, as to make uncertain how much, if any, of such charitable bequests will exist at the time of her death. The Trustee insists that under the authority of Ithaca Trust Company v. United States, 279 U.S. 151, 49 S.Ct. 291, 73 L.Ed. 647; Humes v. United States, 276 U.S. 487, 48 S.Ct. 347, 72 L.Ed. 667; Pennsylvania Company for Insurances on Lives, etc., v. Brown, 3 Cir., 70 F.2d 269; Gammons v. Hassett, 1 Cir., 121 F.2d 229; Mississippi Valley Trust Company v. Commissioner, 8 Cir., 72 F.2d 197; Burdick v. Commissioner, 2 Cir., 117 F.2d 972; United States v. Provident Trust Company, 291 U.S. 272, 54 S.Ct. 389, 78 L.Ed. 793; Farrington v. Commissioner, 1 Cir., 30 F.2d 915, 67 A.L.R. 535, and similar cases, that "the widow, having such a right to use any part of the corpus of the estate, there was no bequest to charity within the meaning of Section 303(a) (3) of the Revenue Act of 1926 as amended," 26 U.S.C.A. Int. Rev.Code § 812(d).
Plaintiff, however, contends that the widow had no authority of any kind except the right to the income of the life estate. Plaintiff further insists that even if there was any theoretical implied authority to use some small part of the corpus, which plaintiff in no wise admits, that actually the holdings of Ithaca Trust Co. v. United States, supra, and United States v. Provident Trust Company, supra, establish that the charitable bequests are still deductible, and plaintiff, in addition, cites numerous Federal and Supreme Court additional decisions, including particularly Mead v. Welch, 9 Cir., 95 F.2d 617; Commissioner v. F. G. Bonfils Trust, 10 Cir., 115 F.2d 788; Sanderson, Executor, v. Commissioner, 18 B.T.A. 221; and Boston, etc., Co. and Pfaff, Executors, v. Commissioner, 21 B.T. A. 394, to the same effect.
The testator's intent is to be ascertained from the will as a whole and not from any isolated portion or portions. The intention of the testator as gathered from all parts of the will is to be given effect. Any doubtful or ambiguous expression cannot be permitted to defeat the obvious intent of the testator. 69 C.J. 52, 53, 59, 62, 63; Cowles v. Matthews, 197 Wash. 652, at page 654, 86 P.2d 273; Shufeldt v. Shufeldt, 130 Wash. 253, 227 P. 6; Evans v. Ockershausen, 69 App.D.C. 285, 100 F. 2d 695, 128 A.L.R. 177.
As stated In re Harper's Estate, 168 Wash. 98, at page 106, 10 P.2d 991, at page 993, 15 P.2d 1119: "In determining the meaning to be given to the words used in a will, extrinsic evidence of the surrounding facts and circumstances may be considered, not for the purpose of proving intention as an independent fact, but as an aid to a right understanding of the language that has been used."
To the same effect are: In re Holmes' Estate, 233 Wis. 274, 289 N.W. 638; In re Doepke's Estate, 182 Wash. 556, 47 P.2d 1009; Cotton v. Bank of California, 145 Wash. 503, 261 P. 104; Shufeldt v....
To continue reading
Request your trial