Henry Uterhart v. United States

• Decision Date: 03 April 1916
• Docket Number: No. 214,214
• Parties: HENRY A. UTERHART and Emil Heuel, as Trustees under the Last Will and Testament of Conrad Stein, Deceased, Appts., v. UNITED STATES
• Court: U.S. Supreme Court

240 U.S. 598

36 S.Ct. 417

60 L.Ed. 819

HENRY A. UTERHART and Emil Heuel, as Trustees under the Last Will and Testament of Conrad Stein, Deceased, Appts.,

v UNITED STATES.

No. 214.

Argued January 24, 1916.

Decided April 3, 1916.

Messrs. H. T. Newcomb and Morris F. Frey for appellants.

Assistant Attorney General Wallace and Mr. William C. Herron for appellee.

[Argument of Counsel from pages 599-600 intentionally omitted] Mr. Justice Pitney delivered the opinion of the court:

This was a suit to recover succession taxes paid by appellants under the act of June 13, 1898 (chap. 448, 30 Stat. at L. 448, 464, Comp. Stat. 1913, § 6144), on account of interests in personal property passing to the residuary legatees under the will of Conrad Stein, deceased. It was brought under the act of June 27, 1902 (chap. 1160, § 3, 32 Stat. at L. 406), which provides for refunding 'so much of said tax as may have been collected on contingent beneficial interests which shall not have become vested prior to July first, nineteen hundred and two.' The testator was domiciled in the state of New York, and the will was probated and appellants were appointed executors and trustees in that jurisdiction. The residuary legatees were seven of the nine children of testator, and at the time of his death on April 6, 1900, several of them were minors. All of the seven were living on July 1, 1902. The youngest, Carl Stein, had not attained the age of twentyone years on that date. The residuary estate amounted to more than $1,000,000, and the taxes collected with respect to it aggregated $17,130.82, being based upon the theory that each of these legatees took a vested seventh interest at the death of the testator. If the taxes had been assessed on the advances actually made by appellants as executors and trustees for the benefit of the residuary legatees prior to July 1, 1902, they would have amounted to only $745.12.

One of the clauses of the will contained words bequeathing the residuary estate outright to the seven children in equal shares; but this was qualified by inconsistent language in other clauses, and some time prior to January 16 1902, one of the executors brought suit in the supreme court of the state of New York against his coexecutors and the beneficiaries for a judicial construction of the will, and a decree was made on the date mentioned, of which the pertinent clauses are set forth in the margin.¹

Testator's personalty passed under the will, and the executors and trustees proceeded under and complied strictly with the directions contained in it, as interpreted and construed by the decree.

The court of claims held (49 Ct. Cl. 709) that the interest bequeathed by the will to the residuary legatees was a vested estate, and not a contingent beneficial interest, citing Vanderbilt v. Eidman, 196 U. S. 480, 49 L. ed. 563, 25 Sup. Ct. Rep. 331, and United States v. Fidelity Trust Co. 222 U. S. 158, 56 L. ed. 137, 32 Sup. Ct. Rep. 59.

It is very properly admitted by the government that the New York decree is in this proceeding binding with respect to the meaning and effect of the will. The right to succeed to the property of the decedent depends upon and is regulated by state law (Knowlton v. Moore, 178 U. S. 41, 57, 44 L. ed. 969, 976, 20 Sup. Ct. Rep. 747), and it is obvious that a judicial construction of the will by a state court of competent jurisdiction determines not only legally but practically the extent and character of the interests taken by the legatees.

It is, however, contended that the will, as thus construed, either gave the residuary estate absolutely to the children by name, share and share alike, postponing payment merely until Carl died or reached majority, or that it gave the estate to them absolutely when Carl died or attained majority, meanwhile giving to each child the income of his or her proportionate share. With this view we cannot concur. The decree declares the true construction to be 'that the whole of his residuary estate, real and personal, should, so far as necessary, be applied to the support and education of his minor children, Josephine Stein, Paula Stein, Ella Stein, and Carl Stein, during the minorities if Carl Stein survive such period.' Then follows a clause to the effect that the trustees should apply the income to the support and education of the minor children until they respectively attain the age of twenty-one years, if Carl survive such period, and that on his attaining the age of twenty-one or sooner dying the testator gave, devised, and bequeathed the residue to the seven named (including Carl) in equal shares. A subsequent clause directs the executors and trustees 'to apply so much of the rents of the real estate, and of the income of the personal estate as shall be reasonable and proper, to the support and education of the testator's said minor children during their respective minorities as aforesaid.' They are empowered, during...