Lucas v. Mercantile Trust Co.

• Decision Date: 30 July 1930
• Docket Number: No. 8840.,8840.
• Citation: 43 F.2d 39
• Parties: LUCAS, Commissioner of Internal Revenue, v. MERCANTILE TRUST CO.
• Court: U.S. Court of Appeals — Eighth Circuit

43 F.2d 39 (1930)

LUCAS, Commissioner of Internal Revenue, v. MERCANTILE TRUST CO.

No. 8840.

Circuit Court of Appeals, Eighth Circuit.

July 30, 1930.

Randolph C. Shaw, Sp. Asst. to Atty. Gen. (G. A. Youngquist, Asst. Atty. Gen., Sewall Key and Barham R. Gary, Sp. Assts. to Atty. Gen., and C. M. Charest, General Counsel, Bureau of Internal Revenue, and Joe S. Franklin, Sp. Atty., Bureau of Internal Revenue, both of Washington, D. C., on the brief), for appellant.

L. L. Hamby, of Washington, D. C. (Frank S. Bright, of Washington, D. C., and S. L. Swarts, of St. Louis, Mo., on the brief), for appellee.

Before KENYON, BOOTH, and GARDNER, Circuit Judges.

KENYON, Circuit Judge.

Appellee is executor under the will of Frank A. Ruf, who died testate on May 28, 1923, while a resident of the state of Missouri. By the terms of his will Ruf made certain provisions as to his widow and many bequests to charitable purposes. He constituted the Mercantile Trust Company his trustee, with broad powers to hold and control the trust estate.

Subdivision (1), article 11 of the will, referring to the trustee's power, is as follows:

"To hold, possess, manage and control the said trust estate and every part thereof, with full power to sell, transfer, convey and dispose of the same, upon such terms, and in such manner, and for such prices, as to my said trustee shall seem meet and proper.

"And I do give and grant unto my said trustee full power and authority to invest and reinvest all or any part of said trust estate which may come into its hands, in such manner, and in such securities, or other property, personal or real, and upon such terms, and for such length of time, as to my trustee shall seem meet and proper; it being intended hereby to give unto my said trustee full and complete authority to hold, possess, manage, control, sell, convey, encumber, lease, invest and reinvest the whole and every part of said trust estate, according to its sole judgment and discretion, without any limitation upon its powers and authority so to do."

Subdivision (2) of article 11 is as follows:

"I direct my trustee, beginning on the fifteenth day of the second month following my death, to pay over unto my wife, Alpha H. Ruf, all of the net income and revenue derived from said Trust estate, or, if need be, such part of the corpus thereof as may be necessary for the comfort, maintenance and support of my wife, during her life. A request, in writing, to my trustee, made by my wife, stating that the sum requested by her is needed for her comfort, maintenance and support, shall be authority to my trustee to pay unto her any sum so requested, out of the corpus; or, in the event of her incapacity, then my trustee may, in its discretion, use so much of the corpus as may be necessary for her comfort, maintenance and support."

He directed that upon the death of his wife the trustee should pay to certain charitable institutions various sums of money. Among these were Father Dunne's Newsboys Home and Protectorate, the Convent of the Good Shepherd, the Epworth School for Girls, the Children's Aid Society, all at St. Louis, Mo.; also to pay the income on certain sums set aside to Bethesda, a corporation of the city of Saint Louis, Mo., for the support, maintenance, and education of poor children; to "The Little Sisters of the Poor," for the support and maintenance of aged poor; to the "German Protestant Orphans' Home" for the support and education of orphans; to another Orphans' Association for the same purpose. The income of other sums was set aside to be used by various associations for the support and maintenance of the indigent blind, the deaf and dumb, and for medical treatment to aid crippled children. After provisions covering these matters, occurs this one:

"I direct my Trustee to pay over and deliver all of the net income and revenue received by it from said trust estate remaining in its hands, unto the St. Louis Children's Hospital to provide perpetually for free medical treatment and maintenance and support during treatment, of poor children, irrespective of consideration of nationality or religion; preference to be given to children residing in the City of Saint Louis and Saint Louis County, Missouri."

The attempted philanthropies of testator were widely and humanely extended.

He left a widow sixty-seven years of age, but no children. The widow filed no renunciation of the will in the probate court, nor did she file an election to take under the will, but has at all times accepted and acted under the provisions thereof.

The question before the Board of Tax Appeals was whether the present values of the bequests for charitable purposes were deductible from decedent's gross estate in arriving at the net estate subject to federal taxation. The Commissioner of Internal Revenue had held they were not so deductible, which made a deficiency in the estate tax of $125,679.22. The Board of Tax Appeals made findings of fact and held that the present values of these bequests could be ascertained and that they were deductible from the gross estate in determining the net estate subject to tax.

A motion by the appellee is presented and was submitted with the case to dismiss the petition for review on four grounds, namely: (a) Failure of appellant to have the clerk of the Board of Tax Appeals prepare and transmit the record to the clerk of this court within the time provided by law; (b) failure to file and transmit to the clerk of this court any statement of the evidence either in or out of time; (c) absence of assignments of error which relate to any issue that was pending before the Board of Tax Appeals; (d) failure of appellant's praecipe designating the record to be transmitted to the clerk of this court to contemplate or call for the transmission of any statement of evidence.

As to ground (c), we may say that, while the assignments of error are defective and inaccurate, they do, in our judgment, cover the errors relied on. (b) and (d) relate to the failure to file any statement of evidence. Counsel for appellee contend that under the rules of practice of this court pertaining to petitions to review decisions of the Board of Tax Appeals it is incumbent upon the party appealing to file a statement of the evidence. This contention is sound where the error assigned is as to the admission or rejection of evidence, or on the ground that a finding of the Board is unsupported by any substantial evidence. The findings of fact of the Board are before us, and the only questions with which we are concerned in this appeal are questions of law. This court has held many times that in appeals from the decisions of the Board of Tax Appeals it is limited to a review of questions of law. That is, whether the decision of the Board is in accordance with law. Whether there is substantial evidence to sustain the findings of fact is a question of law. If such substantial evidence exists, we are bound by those findings. Denver Live Stock Commission Co. v. Commissioner of Internal Revenue (C. C. A.) 29 F.(2d) 543; Conklin-Zonne-Loomis Co. v. Commissioner of Internal Revenue (C. C. A.) 29 F.(2d) 698; Feeders' Supply Co. v. Commissioner of Internal Revenue (C. C. A.) 31 F.(2d) 274; Holmquist v. Blair, Commissioner of Internal Revenue (C. C. A.) 35 F.(2d) 10; Blair, Commissioner of Internal Revenue, v. Byers (C. C. A.) 35 F.(2d) 326.

No question is raised here as to lack of substantial evidence to support the findings of fact by the Board of Tax Appeals. They are accepted by both parties. Nor is any error claimed in the rejection or admission of evidence. The only questions here relate to the construction of a will. Hence we think it would be superfluous to file a statement of the evidence. The rules of practice of this court do not require the doing of useless things. It is true that additional time was secured from the Board of Tax Appeals for preparation of a statement of evidence and for transmission of the record. This was evidently unnecessary as to the statement of evidence. We think there is no merit in grounds (b) and (d) of the motion to dismiss.

As to ground (a), it appears from the certificate of the clerk of the Board of Tax Appeals that the order of redetermination was made by the Board on October 25, 1928; that petition for review was filed by the respondent (appellant) April 13, 1929, which was within the six months provided by law to file a petition for review; that on May 27, 1929, præcipe was filed by the respondent designating the documents to be transmitted by the clerk of the Board of Tax Appeals to the clerk of this court. On June 11, 1929, the Board entered an order enlarging the time for filing of the record to July 15, 1929. Six other orders were made by the Board of Tax Appeals, which resulted in extending the time for preparation of statement of evidence and transmission of record to January 2, 1930. On January 2, 1930, the Board entered an order extending time for preparation of evidence and transmission of record to February 3, 1930....