St. Louis Union Trust Co. v. Becker, No. 10078.

CourtUnited States Courts of Appeals. United States Court of Appeals (8th Circuit)
Writing for the CourtGARDNER, SANBORN, and VAN VALKENBURGH, Circuit
Citation76 F.2d 851
PartiesST. LOUIS UNION TRUST CO. et al. v. BECKER, Collector of Internal Revenue.
Decision Date19 April 1935
Docket NumberNo. 10078.

76 F.2d 851 (1935)

ST. LOUIS UNION TRUST CO. et al.
v.
BECKER, Collector of Internal Revenue.

No. 10078.

Circuit Court of Appeals, Eighth Circuit.

March 13, 1935.

Rehearing Denied April 19, 1935.


76 F.2d 852

Crawford Johnson, of St. Louis, Mo. (Rhodes E. Cave and Thomas S. McPheeters, both of St. Louis, Mo., Duryee, Zunino & Amen, of New York City, and Bryan, Williams, Cave & McPheeters, of St. Louis, Mo., on the brief), for appellants.

Morton K. Rothschild, Sp. Asst. to Atty. Gen. (Frank J. Wideman, Asst. Atty. Gen., Sewall Key and Carlton Fox, Sp. Assts. to Atty. Gen., and Harry C. Blanton, U. S. Atty., of Sikeston, Mo., and Herbert H. Freer, Asst. U. S. Atty., of St. Louis, Mo., on the brief), for appellee.

Before GARDNER, SANBORN, and VAN VALKENBURGH, Circuit Judges.

SANBORN, Circuit Judge.

This is an appeal from a judgment in favor of the appellee in an action at law brought by the appellants to recover $94,022.35 paid by them to the appellee under protest as estate taxes.

The facts, as to which there is virtually no dispute, are as follows:

William Evans Guy, on January 3, 1921, executed four separate written declarations of trust, one for each of his four children, who at that time had reached their majority. By each of the trust instruments he conveyed to himself, as trustee, certain securities of the par value of $72,000; the aggregate value of the securities at that time being $288,000. From time to time thereafter he made additions to these trusts, and at the time of his death on July 24, 1928, the total value of the trust property included in the four trusts was $994,195. This amount the Commissioner of Internal Revenue included as a part of the gross estate of the decedent, under Revenue Act of 1926, § 302 (26 U. S. C. § 1094 26 USCA § 1094), and the appellants, his executors, after paying the additional estate tax which resulted, brought this action to recover it.

The four declarations of trust were identical, with the exception of the name of the beneficiary. The declaration of trust for Evelyn S. Guy is typical of each of the trusts, and, so far as pertinent, is as follows:

"I, William Evans Guy, of the City of St. Louis, and State of Missouri, hereby declare, this third day of January, 1921, that I hold in trust for my daughter, Evelyn S. Guy, the following property, to-wit:" (Here follows description of securities); "with the powers and for the uses and purposes hereinafter set forth, as follows:

"1. I am to have the power at any time, and from time to time, to sell any of the

76 F.2d 853
trust property or estate, for such price and prices as I may determine. Any money coming into my hands as the proceeds of any such sale or otherwise and forming a part of the principal of said trust estate shall as soon as practicable, be reinvested by me. In making such investments, I am to have full power to purchase any property, real or personal, which I may think desirable to acquire or hold as part of the said trust estate, and I am not to be restricted to the purchase of such property as is ordinarily deemed advisable for trust property. I am likewise to have the power to rent or lease any and all real estate which may be included in said trust property for terms of any duration, whether such terms shall extend to a time beyond the termination of this trust or not. I am likewise to have full power and authority in my discretion to borrow money and secure the sums so borrowed by pledge or mortgage of any and all portions of said trust estate and I may out of the corpus or income of said trust estate, or out of both such corpus and income repay the sums so borrowed. I am to have full authority to invest or reinvest any sums so borrowed; and to collect and receive the rents, income and profits arising from the trust estate therein created. It being my intention to retain as trustee (italics ours) such rights, power and authority in respect to the management, control and disposition of said trust estate for the use and benefit of the beneficiary, as I have with respect to property absolutely owned by me

"2. Out of the income and revenue accruing from said trust estate I shall have power to pay all taxes, expenses necessarily or properly incident to its care, preservation and management; and all other reasonable or necessary charges incident to the administration of the trust created hereby, and out of the remaining income and revenue, I am to pay the beneficiary of this trust an allowance of $300.00 a month, with power in my discretion from time to time to increase or decrease the said allowance whenever I may deem it to be to the best interest of the said beneficiary, to have such allowance increased or decreased. I shall have the power, from time to time, out of the remainder of said income and revenue, to appropriate and pay such sums as I may deem reasonably necessary for the maintenance, support and education of said beneficiary. Any income not distributed as hereinabove provided shall be added to the principal of the trust estate.

"3. In case of an emergency, or illness of said beneficiary, requiring a greater sum than that accruing as income or revenue, I shall have power to use as much of the principal of said trust estate as may be absolutely necessary.

"4. Any receipt given by the beneficiary of this trust to me for any sum paid to her by me, shall be a full acquittance and discharge for the payment mentioned in such receipt.

"5. The foregoing provisions for my said daughter, Evelyn S. Guy, shall be for her sole and separate use, free from all statutory and marital rights of her husband; and free from her debts and without the right on her part to assign, pledge, hypothecate, or anticipate, or in any way create a lien upon any of the income or corpus of the trust estate hereby created before she shall receive the same, nor shall any of the said income or corpus be subject to any claims of any persons who may at any time be creditors of my said daughter.

"6. (a) If the said beneficiary should die before my death, then this trust estate shall thereupon revert to me and become mine immediately and absolutely, or (b) if I should die before her death, then this property shall thereupon become hers immediately and absolutely and be turned over to her and in either case this trust shall cease."

"Signed William Evans Guy "Witness: Wm. Edwin Guy."

In 1921, at the time these trusts were made, Mr. Guy was seventy-six years of age. Long prior to that time he had retired from the active management of any corporations in which he was interested, but he conducted his own affairs, which were extensive, and continued as a director of the St. Louis Cold Storage Company, the Laclede Steel Company, and as trustee and director in several syndicates. He maintained a downtown office, where he went every business day when the weather was good, from September to June, which was the portion of the year that he spent in St. Louis. He took an active interest in all matters with which he was connected. He made a practice of consulting his physician on an average of about once in six months, and enjoyed almost perfect health for a man of his years. He had not consulted his physician for some time prior to

76 F.2d 854
the date of the execution of the trusts, so far as the physician could remember. In June, 1928, about two months prior to his death, he had had a physical examination, which disclosed no change in his condition. He was an optimistic and cheerful man, and exceptionally alert mentally. He came of a long-lived family, and frequently had made the statement that he expected to live to be at least ninety. It seems that two of his immediate ancestors had lived beyond that age. None of his friends knew of any ailment which might have led him to suspect that his death was to be expected in the near future. He was careful of his health, but obviously not concerned about death. In fact, the evidence indicates that he was, at the time these trusts were executed, in as good physical and mental condition as possible for any man of his years. His purpose in making the four trusts, as expressed to his son (who drafted the instruments) and to at least one of his friends, was to make his children independent of him, to enable them to know what they might expect each year, in lieu of an allowance out of his own income, and to avoid the high surtax which would be imposed upon his income if he retained his property for himself

The action was tried to the court below without a jury. Two questions were presented:

(1) Was the transfer of the property included in these four trusts intended to take effect in possession or enjoyment at or after death?

(2) Were the transfers made in contemplation of death?

The court below found that none of the beneficiaries named in the trust instruments acquired custody, control, or title to the corpus of the trust prior to the death of the settlor; that the title of the beneficiaries was contingent upon their survival of the settlor; and that the motive for the creation of the trusts was to decrease the settlor's income taxes by distributing the property and thus avoiding the high rate for large incomes, and at the same time to make provision for the distribution of the property included in the trusts at the settlor's death. The court concluded that the corpus of the trusts was transferred in contemplation of death, that the transfers were intended to take effect in possession and enjoyment at and after death, and that the value of the trust property was therefore properly included in the gross estate.

It was the contention of the appellee, Collector of Internal Revenue, in the court below, and is his contention here, that the death of the settlor, rather than the trust instruments, constituted the generating source of title in the beneficiaries, since the final receipt and complete enjoyment of the trust property by them was contingent upon their surviving the...

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5 practice notes
  • Bell v. United States, Civ. No. 1087.
    • United States
    • United States District Courts. 8th Circuit. United States District Court of Minnesota
    • November 7, 1947
    ...Neal et al. v. Commissioner, 8 Cir., 53 F.2d 806; Willcuts v. Stoltze, 8 Cir., 73 F.2d 868; St. Louis Union Trust Co. v. Becker, 8 Cir., 76 F.2d 851; Updike v. Commissioner, 8 Cir., 88 F.2d 807; Loetscher v. Burnet, 60 App.D.C. 38, 46 F. 2d 835; Commissioner v. Nevin, 3 Cir., 47 F.2d 478; H......
  • Epsen Lithographers v. O'MALLEY, Civil Action No. 550.
    • United States
    • United States District Courts. 8th Circuit. United States District Court of Nebraska
    • June 14, 1946
    ...and will only support a finding in the absence of any substantial evidence to the contrary. St. Louis Union Trust Co. v. Becker, 8 Cir., 76 F.2d 851, affirmed 296 U.S. 48, 56 S.Ct. 78, 80 L.Ed. 35. Where the act of the commissioner is reviewed judicially, his findings of fact in making an a......
  • Clifford v. Helvering, No. 11431.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • July 19, 1939
    ...That an owner of property may declare himself trustee of his property is now well settled. St. Louis Union Trust Co. v. Becker, 8 Cir., 76 F.2d 851; Becker v. St. Louis Union Trust Co., 296 U.S. 48, 56 S. Ct. 78, 80 L.Ed. 35; Morsman v. Commissioner, 8 Cir., 90 F.2d 18, 113 A.L.R. 441. Thus......
  • Paster v. Commissioner, Docket No. 75409
    • United States
    • United States Tax Court
    • August 24, 1961
    ...with the local laws of conveyance. Becker v. St. Louis Union Trust Co. 36-1 USTC ¶ 9006, 296 U. S. 48 (1935), affirming 35-1 USTC ¶ 9223, 76 F. 2d 851 (C. A. 8, 1935). We need not consider, however, whether under the laws of Minnesota a conveyance of real estate by one person to another on ......
  • Request a trial to view additional results
5 cases
  • Bell v. United States, Civ. No. 1087.
    • United States
    • United States District Courts. 8th Circuit. United States District Court of Minnesota
    • November 7, 1947
    ...Neal et al. v. Commissioner, 8 Cir., 53 F.2d 806; Willcuts v. Stoltze, 8 Cir., 73 F.2d 868; St. Louis Union Trust Co. v. Becker, 8 Cir., 76 F.2d 851; Updike v. Commissioner, 8 Cir., 88 F.2d 807; Loetscher v. Burnet, 60 App.D.C. 38, 46 F. 2d 835; Commissioner v. Nevin, 3 Cir., 47 F.2d 478; H......
  • Epsen Lithographers v. O'MALLEY, Civil Action No. 550.
    • United States
    • United States District Courts. 8th Circuit. United States District Court of Nebraska
    • June 14, 1946
    ...and will only support a finding in the absence of any substantial evidence to the contrary. St. Louis Union Trust Co. v. Becker, 8 Cir., 76 F.2d 851, affirmed 296 U.S. 48, 56 S.Ct. 78, 80 L.Ed. 35. Where the act of the commissioner is reviewed judicially, his findings of fact in making an a......
  • Clifford v. Helvering, No. 11431.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • July 19, 1939
    ...That an owner of property may declare himself trustee of his property is now well settled. St. Louis Union Trust Co. v. Becker, 8 Cir., 76 F.2d 851; Becker v. St. Louis Union Trust Co., 296 U.S. 48, 56 S. Ct. 78, 80 L.Ed. 35; Morsman v. Commissioner, 8 Cir., 90 F.2d 18, 113 A.L.R. 441. Thus......
  • Paster v. Commissioner, Docket No. 75409
    • United States
    • United States Tax Court
    • August 24, 1961
    ...with the local laws of conveyance. Becker v. St. Louis Union Trust Co. 36-1 USTC ¶ 9006, 296 U. S. 48 (1935), affirming 35-1 USTC ¶ 9223, 76 F. 2d 851 (C. A. 8, 1935). We need not consider, however, whether under the laws of Minnesota a conveyance of real estate by one person to another on ......
  • Request a trial to view additional results

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