Caughn v. Real Estate Land Title Trust Co

• Citation: 297 U.S. 606,80 L.Ed. 879,56 S.Ct. 604
• Decision Date: 30 March 1936
• Docket Number: No. 629,629
• Parties: McCAUGHN, Collector of Internal Revenue, v. REAL ESTATE LAND TITLE & TRUST CO. et al
• Court: United States Supreme Court

297 U.S. 606

56 S.Ct. 604

80 L.Ed. 879

McCAUGHN, Collector of Internal Revenue,

v REAL ESTATE LAND TITLE & TRUST CO. et al.

No. 629.

Argued March 13, 1936.

Decided March 30, 1936.

Messrs. Homer S. Cummings, Atty. Gen., and J. P. Jackson, Asst. Atty. Gen., for petitioner.

Mr. Franklin S. Edmonds, of Philadelphia, Pa., for respondents.

PER CURIAM.

On February 9, 1920, Malcolm MacFarlan, a physician of Philadelphia, Pa., made a transfer of real estate and securities, of the value of upwards of $670,000, in trust for the benefit of his children and their wives and descendants. He died on December 8, 1921. As his death occurred within two years after the transfer, it fell within the terms of the statute creating a pre- sumption that the transfer was made in contemplation of death. Revenue Act of 1921, c. 136, § 402(c), 42 Stat. 227, 277, 278. The remaining estate of the decedent, of which disposition was made by will (executed on the same day as the transfer in trust) was worth about $13,000. The Commissioner of Internal Revenue included the property transferred as part of decedent's gross estate, and demanded payment of an estate tax upon that basis. The payment was made, claim for refund was rejected, and this suit was brought by t e executors of the decedent against the collector to recover the amount paid.

A jury was waived. After the evidence had been received, both parties submitted requests for conclusions of law, and plaintiffs also requested special findings of fact. The court refused plaintiffs' requests and affirmed certain conclusions of law requested by defendant and plaintiffs were allowed exceptions.

Referring to decedent's physical condition, the court said in its opinion that the evidence showed that at the time of the transfer decedent was 78 years old, unusually vigorous and clear-minded, and, except for a condition common in men of his age, in good health. The court said that the most that could be claimed for that evidence was that it established, and the court specifically found, that the transfer was not made 'under any consciousness or belief or apprehension that death was imminent.' The substance of the court's conclusion on all the evidence was that 'the plaintiffs have failed to show that the motive that induced this transfer, whatever it was, was not of the sort which leads to testamentary disposition, and, consequently, have failed to meet the burden of proof placed upon them by the statute.' The court then found a general verdict in favor of the defendant and directed judgment accordingly. (D.C.) 7 F.Supp. 742, 744.

The Circuit Court of Appeals reviewed the evidence, decided that the transfer was not made in contemplation of death, and reversed the judgment. 79 F.(2d) 602.

The principles governing the determination whether a gift inter vivos is made 'in contemplation of death' are set forth in United States v. Wells, 283 U.S. 102, 51 S.Ct. 446, 75 L.Ed. 867, and need not be restated. The instant case is controlled by the established rules relating to appellate review in actions at law where a jury trial has been waived. Rev.St. §§ 649, 700, as...