KENT, District Judge.
This is an action to recover Federal Estate Tax alleged to have been wrongfully assessed and collected by the defendant’s decedent, who was, during his lifetime, the Collector of Internal Revenue for the District of Michigan. Involved are three (3) trust indentures, identical in terms except for the beneficiaries, each trust being for the benefit of one of the three (3) sons of R. Wallace Hook. Each trust was created in 1931.
The action was commenced in the United States District Court for the Eastern District of Michigan, and a partial summary judgment was entered in that Court determining that the corpus of the respective trusts was subject to Estate Tax on the death of the donor trustee. The terms of the trusts are set forth in detail in the opinion of District Judge Freeman, in Michigan Trust Co. v. Kavanagh, D.C., 137 F.Supp. 52.
Subsequent to the entry of the partial summary judgment the case was transferred to this Court upon petition of the plaintiff. All facts have been stipulated, including the amount of tax refundable in the event plaintiff recovers. The only pertinent portion of the trust indentures not set forth in the opinion of Judge Freeman, is Paragraph Second which reads as follows:
“Any part of the income of this trust not distributed during the existence of this trust shall be added to the trust property and disposed of in accordance with the terms of this trust for the disposition of the trust property.”
Thus it is obvious that any accumulated income not distributed during the period [228]*228denominated by the trust indenture became a part of the corpus and was subject to the same limitations and powers as was the corpus when originally transferred.
Plaintiff relies heavily on the decision of the Court of Appeals for the Seventh Circuit, Commissioner of Internal Revenue v. McDermott’s Estate, 7 Cir., 1955, 222 F.2d 665, 667, 55 A.L.R.2d 410. In that case the decedent had created eight (8) separate trusts for the benefit of his wife and seven (7) children. The decedent was designated as trustee and each trust contained the usual provisions, except that by the terms of each indenture the trustee was authorized to accumulate all or part of the trust income, such accumulations being added to the original trust corpus, as is true in the instant case. The trustee in the McDermott case was also given much control in the handling and distribution of the accumulation, and in each of the trusts, except that for the benefit of the wife, the trustee was authorized to invade the corpus and make distribution to the named beneficiary in the event need arose because of “accident, sickness or other emergency or unusual condition of any kind presently unseen.” The trustee could in no way otherwise revoke or modify the terms of the trust and could not benefit from or acquire an interest in either the corpus or the income of the trusts. The original corpus in each trust consisted of securities upon which a dividend was realized shortly after the creation of the trusts. The dividend was accumulated in each trust and United States Savings Bonds were purchased with the proceeds. After the payment of the single dividend the trusts were inactive. The Commissioner assessed an Estate Tax, holding that the corpus and the accumulated income of each trust was includible in the gross estate of the decedent. The Tax Court held that the corpus was taxable, but further held that the accumulated income was not taxable under Title 26, U.S.C. § 811(c) or (d). The Commissioner appealed upon the issue of the taxability of the accumulated income. The Seventh Circuit affirmed the Tax Court, relying upon Burns v. Commissioner, 5 Cir., 1949, 177 F.2d 739, and Commissioner of Internal Revenue v. Gidwitz’ Estate, 7 Cir., 1952, 196 F.2d 813. Both the Burns case and the Gidwitz case were decided under the provisions of Title 26 U.S.C. § 811(c), relating to transfers in contemplation of death.
The instant case arises under Section 811(d)(2).1 The issue of a gift in contemplation of death is not before the Court.
Defendant relies upon Estate of Yawkey v. C. I. R., 1949, 12 T.C. 1164, and Estate of Spiegel v. Commissioner, 1949, 335 U.S. 701, 69 S.Ct. 301, 93 L.Ed. 330, rehearing denied 336 U.S. 915, 69 S.Ct. 599, 93 L.Ed. 1079.
The Court of Appeals for the Seventh Circuit in the McDermott case, supra,, holds, 222 F.2d at pages 667-668:
“The Commissioner in his attempt-to escape our holding in Gidwitz argues that here ‘the transfers were not complete until taxpayer’s [decedent’s] death since the property transferred is includible in his estate by reason of retained powers to designate who shall enjoy, under Code Section 811(c) (1) (B), and to change the enjoyment of the trust estate through a power to alter, amend or revoke, under Code Section 811(d) [229]*229(1).’ We think this attempted distinction is without merit. The transfer in the instant case was as complete as it was in the Gidwitz case. The trusts were irrevocable, with no power reserved in the settlor or trustee to revoke, change or modify the terms of the trusts for his benefit or in a manner by which he could ever acquire any interest in either the corpus or the income therefrom. He received the dividends (accumulations) on the trust corpus (corporate stock) solely in his capacity as a trustee. He was without power or right to receive such dividends in any other capacity. The fact that the trustee retained some control over the manner of handling the accumulations and their distribution does not militate against the fact that the transfer of the trust corpus was complete when made. Such control or power as was retained did not or could not result in any financial benefit to the trustee, and neither could it affect the rights of the beneficiaries in the aggregate. It could result in nothing more than the shifting of benefits and a determination as to the time of their enjoyment by the beneficiaries. It is thus our view that the Tax Court properly relied upon the Gidwitz case as authority for its position. * * *
“A study of the involved statute without the aid of any adjudicated case leads us to the conclusion that the Commissioner’s contention is not sound. The statute lays its hand upon property which has been transferred under the enumerated contingencies. Whether the trust agreement comes within the sweep of an enumerated contingency is immaterial unless the property sought to be taxed at decedent’s death was included in the property transferred at the time of the creation of the trust. Irrespective of all other considerations, property to be includible must have been transferred. Obviously, the accumulations here involved were ¿lot transferred by the decedent to the trustee. It is true, of course, that the accumulations, represented the fruit derived from the property which was transferred but, even so, Congress did not make provision for including the fruit, it provided only for the property transferred.
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KENT, District Judge.
This is an action to recover Federal Estate Tax alleged to have been wrongfully assessed and collected by the defendant’s decedent, who was, during his lifetime, the Collector of Internal Revenue for the District of Michigan. Involved are three (3) trust indentures, identical in terms except for the beneficiaries, each trust being for the benefit of one of the three (3) sons of R. Wallace Hook. Each trust was created in 1931.
The action was commenced in the United States District Court for the Eastern District of Michigan, and a partial summary judgment was entered in that Court determining that the corpus of the respective trusts was subject to Estate Tax on the death of the donor trustee. The terms of the trusts are set forth in detail in the opinion of District Judge Freeman, in Michigan Trust Co. v. Kavanagh, D.C., 137 F.Supp. 52.
Subsequent to the entry of the partial summary judgment the case was transferred to this Court upon petition of the plaintiff. All facts have been stipulated, including the amount of tax refundable in the event plaintiff recovers. The only pertinent portion of the trust indentures not set forth in the opinion of Judge Freeman, is Paragraph Second which reads as follows:
“Any part of the income of this trust not distributed during the existence of this trust shall be added to the trust property and disposed of in accordance with the terms of this trust for the disposition of the trust property.”
Thus it is obvious that any accumulated income not distributed during the period [228]*228denominated by the trust indenture became a part of the corpus and was subject to the same limitations and powers as was the corpus when originally transferred.
Plaintiff relies heavily on the decision of the Court of Appeals for the Seventh Circuit, Commissioner of Internal Revenue v. McDermott’s Estate, 7 Cir., 1955, 222 F.2d 665, 667, 55 A.L.R.2d 410. In that case the decedent had created eight (8) separate trusts for the benefit of his wife and seven (7) children. The decedent was designated as trustee and each trust contained the usual provisions, except that by the terms of each indenture the trustee was authorized to accumulate all or part of the trust income, such accumulations being added to the original trust corpus, as is true in the instant case. The trustee in the McDermott case was also given much control in the handling and distribution of the accumulation, and in each of the trusts, except that for the benefit of the wife, the trustee was authorized to invade the corpus and make distribution to the named beneficiary in the event need arose because of “accident, sickness or other emergency or unusual condition of any kind presently unseen.” The trustee could in no way otherwise revoke or modify the terms of the trust and could not benefit from or acquire an interest in either the corpus or the income of the trusts. The original corpus in each trust consisted of securities upon which a dividend was realized shortly after the creation of the trusts. The dividend was accumulated in each trust and United States Savings Bonds were purchased with the proceeds. After the payment of the single dividend the trusts were inactive. The Commissioner assessed an Estate Tax, holding that the corpus and the accumulated income of each trust was includible in the gross estate of the decedent. The Tax Court held that the corpus was taxable, but further held that the accumulated income was not taxable under Title 26, U.S.C. § 811(c) or (d). The Commissioner appealed upon the issue of the taxability of the accumulated income. The Seventh Circuit affirmed the Tax Court, relying upon Burns v. Commissioner, 5 Cir., 1949, 177 F.2d 739, and Commissioner of Internal Revenue v. Gidwitz’ Estate, 7 Cir., 1952, 196 F.2d 813. Both the Burns case and the Gidwitz case were decided under the provisions of Title 26 U.S.C. § 811(c), relating to transfers in contemplation of death.
The instant case arises under Section 811(d)(2).1 The issue of a gift in contemplation of death is not before the Court.
Defendant relies upon Estate of Yawkey v. C. I. R., 1949, 12 T.C. 1164, and Estate of Spiegel v. Commissioner, 1949, 335 U.S. 701, 69 S.Ct. 301, 93 L.Ed. 330, rehearing denied 336 U.S. 915, 69 S.Ct. 599, 93 L.Ed. 1079.
The Court of Appeals for the Seventh Circuit in the McDermott case, supra,, holds, 222 F.2d at pages 667-668:
“The Commissioner in his attempt-to escape our holding in Gidwitz argues that here ‘the transfers were not complete until taxpayer’s [decedent’s] death since the property transferred is includible in his estate by reason of retained powers to designate who shall enjoy, under Code Section 811(c) (1) (B), and to change the enjoyment of the trust estate through a power to alter, amend or revoke, under Code Section 811(d) [229]*229(1).’ We think this attempted distinction is without merit. The transfer in the instant case was as complete as it was in the Gidwitz case. The trusts were irrevocable, with no power reserved in the settlor or trustee to revoke, change or modify the terms of the trusts for his benefit or in a manner by which he could ever acquire any interest in either the corpus or the income therefrom. He received the dividends (accumulations) on the trust corpus (corporate stock) solely in his capacity as a trustee. He was without power or right to receive such dividends in any other capacity. The fact that the trustee retained some control over the manner of handling the accumulations and their distribution does not militate against the fact that the transfer of the trust corpus was complete when made. Such control or power as was retained did not or could not result in any financial benefit to the trustee, and neither could it affect the rights of the beneficiaries in the aggregate. It could result in nothing more than the shifting of benefits and a determination as to the time of their enjoyment by the beneficiaries. It is thus our view that the Tax Court properly relied upon the Gidwitz case as authority for its position. * * *
“A study of the involved statute without the aid of any adjudicated case leads us to the conclusion that the Commissioner’s contention is not sound. The statute lays its hand upon property which has been transferred under the enumerated contingencies. Whether the trust agreement comes within the sweep of an enumerated contingency is immaterial unless the property sought to be taxed at decedent’s death was included in the property transferred at the time of the creation of the trust. Irrespective of all other considerations, property to be includible must have been transferred. Obviously, the accumulations here involved were ¿lot transferred by the decedent to the trustee. It is true, of course, that the accumulations, represented the fruit derived from the property which was transferred but, even so, Congress did not make provision for including the fruit, it provided only for the property transferred. If it desired and intended to include the accumulations, it would have been a simple matter for it to have so stated.”
We are not satisfied, as was the Court of Appeals for the Seventh Circuit, that the restriction in Section 811(d)(2) is limited to situations where the donor trustee is in a position to financially benefit through the exercise of the power to alter the rights of beneficiaries.
The authorities are fully set forth in the opinion of Judge Freeman in Michigan Trust Co. v. Kavanagh. We have examined the cases cited by counsel and with the exception of the McDermott case none seem to be truly applicable to the situation in the instant case. It would appear to this Court that the decedent, R. Wallace Hook, by creating the trusts transferred to the trusts, for the benefit of his sons, the corpus and the right to-receive the income from the corpus. The power to alter or amend which existed in regard to the corpus under the provisions of Paragraphs First, Second, Seventh, Eighth, Twelfth, and Seventeenth,2 could [230]*230be exercised equally as to the corpus and the accumulated income. The enumerated provisions of each of the trust indentures apply equally to all trust property and accumulated income became trust propei’ty under the provisions of Paragraph Second, as set forth above.
The decedent Hook, by creating the trusts transferred to himself as trustee, the right to receive the income from the corpus without any financial benefit to himself individually, but reserved the right to determine when and how each beneficiary should enjoy the income and thereby reserved to himself a “power to alter, amend, or revoke,” within the meaning of the provisions of Section 811 (d)(2).
We recognize with respect the decision of the Seventh Circuit in the McDermott case, supra, but we are satisfied that it should be limited to the particular facts, and that the reasoning of that court cannot be applied to the trust instruments involved in this case.
Judgment will be entered for the defendant and the defendant may present the necessary order.