Stubblefield v. United States, 42038.

• Decision Date: 02 April 1934
• Docket Number: No. 42038.,42038.
• Citation: 6 F. Supp. 440
• Parties: STUBBLEFIELD v. UNITED STATES.
• Court: U.S. Claims Court

6 F. Supp. 440

STUBBLEFIELD v. UNITED STATES.

No. 42038.

Court of Claims.

April 2, 1934.

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Frederick Schwertner, of Washington, D. C., for plaintiff.

J. H. Sheppard, of Washington, D. C., and Frank J. Wideman, Asst. Atty. Gen. (Elizabeth B. Davis, of Washington, D. C., on the brief), for the United States.

Before BOOTH, Chief Justice, and GREEN, LITTLETON, WILLIAMS, and WHALEY, Judges.

BOOTH, Chief Justice.

The plaintiff in this case is the executrix of the estate of her deceased husband, Thomas W. Stubblefield. The suit is for the recovery of an estate tax alleged to have been illegally assessed and collected by the Commissioner of Internal Revenue under the following provisions of the Revenue Act of 1924 (43 Stat. 253, 304, 26 USCA § 1094 note):

"Sec. 302. The value of the gross estate of the decedent shall be determined by including the value at the time of his death of all property, real or personal, tangible or intangible, wherever situated — * * *

"(c) To the extent of any interest therein of which the decedent has at any time made a transfer, or with respect to which he has at any time created a trust, in contemplation of or intended to take effect in possession or enjoyment at or after his death, except in case of a bona fide sale for a fair consideration in money or money's worth. Any transfer of a material part of his property in the nature of a final disposition or distribution thereof, made by the decedent within two years prior to his death without such a consideration, shall, unless shown to the contrary, be deemed to have been made in contemplation of death within the meaning of Part I of this chapter."

The facts of record determine the issue. The case of United States v. Wells, 283 U. S. 102, 51 S. Ct. 446, 75 L. Ed. 867, is the applicable precedent. Plaintiff in filing an estate-tax return with the collector omitted from the same the value of certain parcels of real estate and the sum of $69,085.95 in money admittedly received by her within two years of the death of the testator. The Commissioner in an audit and review of the return determined an increase in the value of the gross estate, and after the allowance of certain deductions assessed and collected a deficiency tax of $5,426.54, which with interest amounted to $6,025.23. This amount the plaintiff paid under protest, later filed a timely claim for refund, and this suit is for the recovery of a judgment for the tax so paid.

The Commissioner justified his action under the theory that the transfer of the real property, as well as the money paid to the plaintiff, had been and was made by the testator in contemplation of death.

All the transfers occurred within two years prior to the testator's death. The realty deeded embraced several properties determined by the Commissioner to be of the net value of $328,000. The testator had been in poor health for several years prior to the execution of the deeds, and his physical condition was precarious. The attending physician had warned him repeatedly as to the necessity of observing rigid rules of diet, rest, and inactivity if he wished to escape the consequences of serious organic ailments.

On December 25, 1923, the testator suffered a collapse while walking on the street toward his home, and had to be assisted thereto. The doctor was immediately called, and the diagnosis of his condition disclosed an unsound heart, due to a development of previous organic trouble of a serious nature. His serious illness continued for many days, and it was during this period that the testator executed to the plaintiff the deeds for the realty involved.

We need not recite in detail all that occurred; it is sufficient to state that it is impossible, in view of the record, to reconcile the transaction upon any other basis than that the "controlling motive" for the transfer of the property was contemplation of death. Not only were deeds drawn up for the transfer of the most valuable of the testator's realty possessions, but a will was executed disposing of the remainder of his estate, and notwithstanding this will was superseded by a later one, all the facts and circumstances indicate positively that the existing serious illness of the testator moved him to comply with the wishes of the plaintiff, which she had persistently theretofore urged him to do before it was too late, and this he did, despite the protests of his business partner, and contrary to his attitude with respect to the subject when he deemed himself a well man. The first deed was executed on January 10, 1924, fifteen days after the serious attack of December 25, 1923. This deed embraced all the properties transferred; it was not recorded, for later separate deeds were executed for individual properties and recorded. At no time following this transaction was the...