Union Trust Co. v. Commissioner

Third Circuit

Union Trust Co. v. Commissioner

84 F.2d 386, 17 A.F.T.R. (P-H) 1304, 1936 U.S. App. LEXIS 4480

CourtCourt of Appeals for the Third Circuit

DecidedMay 28, 1936

DocketNo. 5983

StatusPublished

Cited by5 cases

This text of 84 F.2d 386 (Union Trust Co. v. Commissioner) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Union Trust Co. v. Commissioner, 84 F.2d 386, 17 A.F.T.R. (P-H) 1304, 1936 U.S. App. LEXIS 4480 (3d Cir. 1936).

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Opinion

BUFFINGTON, Circuit Judge.

This is a petition for review of a decision of the Board of Tax Appeals. Thomas W. Phillips, Jr., executed a trust agreement naming the petitioner as trustee and designating his four children then living and any after-born children as beneficiaries. The trustee filed four separate income tax returns up to 1924, and after the birth of a fifth child in 1924 filed five separate income tax returns. The commissioner concluded that but one trust estate was created by the deed of trust and determined a deficiency. The board sustained the commissioner.

The decisive question is whether the deed of trust created one or five trust estates. Since this question involves the construction of a written contract, it is a question of law and the board’s conclusions are subject to review on appeal. Without setting out the trust deed in ex-tenso, we think the purpose of the deed is clearly shown to create separate trusts for each of the grantor’s children. Such plural expressions as “trust estates,” “trusts,” “said estates,” “trust funds,” “several trust estates,” “respective trust estates,” indicate that the grantor had in mind, not one, but several trust estates. The provisions that the trustee keep accounts with all the beneficiaries separately likewise indicate an intention on the part of the grantor to create separate trusts. Although the trust instruments in the cases of United States Trust Company of New York v. Commissioner, 296 U.S. 481, 56 S.Ct. 329, 80 L.Ed. 340, and Helvering v. McIlvaine, 296 U.S. 488, 56 S.Ct. 332, 80 L.Ed. 345, differ in certain respects from the trust instrument in the instant case, we think they are favorable to the contention of the petitioner that several trusts were created in the instant case.

So holding, the order of the Tax Board is reversed and the record returned for procedure in accordance herewith.

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BUFFINGTON, Circuit Judge.

This is a petition for review of a decision of the Board of Tax Appeals. Thomas W. Phillips, Jr., executed a trust agreement naming the petitioner as trustee and designating his four children then living and any after-born children as beneficiaries. The trustee filed four separate income tax returns up to 1924, and after the birth of a fifth child in 1924 filed five separate income tax returns. The commissioner concluded that but one trust estate was created by the deed of trust and determined a deficiency. The board sustained the commissioner.

The decisive question is whether the deed of trust created one or five trust estates. Since this question involves the construction of a written contract, it is a question of law and the board’s conclusions are subject to review on appeal. Without setting out the trust deed in ex-tenso, we think the purpose of the deed is clearly shown to create separate trusts for each of the grantor’s children. Such plural expressions as “trust estates,” “trusts,” “said estates,” “trust funds,” “several trust estates,” “respective trust estates,” indicate that the grantor had in mind, not one, but several trust estates. The provisions that the trustee keep accounts with all the beneficiaries separately likewise indicate an intention on the part of the grantor to create separate trusts. Although the trust instruments in the cases of United States Trust Company of New York v. Commissioner, 296 U.S. 481, 56 S.Ct. 329, 80 L.Ed. 340, and Helvering v. McIlvaine, 296 U.S. 488, 56 S.Ct. 332, 80 L.Ed. 345, differ in certain respects from the trust instrument in the instant case, we think they are favorable to the contention of the petitioner that several trusts were created in the instant case.

So holding, the order of the Tax Board is reversed and the record returned for procedure in accordance herewith.

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Bluebook (online)

84 F.2d 386, 17 A.F.T.R. (P-H) 1304, 1936 U.S. App. LEXIS 4480, Counsel Stack Legal Research, https://law.counselstack.com/opinion/union-trust-co-v-commissioner-ca3-1936.

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