Burger v. Commissioner , 12 B.T.A. 1391 ( 1928 )

AUGUSTA C. BURGER, CENTRAL UNION TRUST CO., OF NEW YORK, AND EDO E. MERCELIS, EXECUTORS OF THE WILL OF WILLIAM H. BURGER, PETITIONERS, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

Burger v. Commissioner

Docket No. 13085.

United States Board of Tax Appeals

12 B.T.A. 1391; 1928 BTA LEXIS 3342;

July 18, 1928, Promulgated

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Precatory clause in decedent's will held not to create a trust in favor of charitable organizations named in a letter which was not a part of the will.

Edo E. Mercelis, Esq., for the petitioners.

Frank S. Easby-Smith, Esq., for the respondent.

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ARUNDELL

The executors of decedent's estate seek redetermination of a deficiency in estate tax of $1,140 under the Revenue Act of 1921, arising out of the respondent's disallowance of claimed deductions for religious, charitable, and similar bequests. The proceeding was submitted on the pleadings.

FINDINGS OF FACT.

The petitioners are the executors of the Estate of William H. Burger, deceased, who died on the 4th day of December, 1922, a resident of the Borough of Brooklyn of the City of New York in the State of New York, leaving a last will and testament dated the 15th day of June, 1916, which was duly admitted to probate by the Surrogate's Court of the County of Kings in the State of New York, on the 11th day of December, 1922.

Decedent's will contains the following clause:

THIRD: - If, after providing for the foregoing, the net value of my estate shall equal or exceed Three Hundred Thousand ($300,000) Dollars, I give and bequeath to my wife, AUGUSTA C. BURGER, ten (10%) per centum of the net value thereof, with the request that the distribute it as gifts to certain persons and charitable objects, to be designated by me in a letter to her which will be found among my effects.

A letter dated June 2, 1916, signed by the decedent, was found among his effects after his death. This letter, addressed to "Mrs. Wm. H. Burger," reads in part:

A provision of my will directs that, if my Estate shall amount to $300,000 or more, the Ten (10) per centum of the net amount thereof shall be given to you absolutely - to be applied as I would request in a letter to you.

This is the letter and my request with reference to this "Special bequest" to you, is as follows - viz - :

[Here follows a list of persons and institutions and the amount decedent wished to be given to each.]

All of these bequests are of course optional with you, my precious wife * * *.

* * *

This letter is your secret and can continue so, if for any reason you deem it best; but I hope all the provisions I have made therein may be carried out.

The net value of decedent's estate, after paying all just debts, funeral expenses and expenses of administration and the bequests set forth in the will, exceeded $300,000. Out of the 10 per cent of the net value of decedent's estate Augusta C. Burger, in compliance with the request contained in the above letter, paid to each of the following named, all of which are domestic corporations, organized and operated exclusively for religious, charitable, scientific, literary or educational purposes, no part of the net earnings of which inures to the benefit of any private stockholder or individual, the amount set opposite its name:

Emmanuel Baptist Church of Brooklyn	$10,000
American Baptist Foreign Mission Society	2,000
American Baptist Home Mission Society	1,000
Orphan Asylum Society of City of Brooklyn	1,000
Rochester Theological Seminary	2,000
Brooklyn Young Men's Christian Association	2,000
Baptist Home of Brooklyn	1,000

OPINION.

ARUNDELL: For the purpose of arriving at the value of the net estate of a decedent, section 403(b)(3) of the Revenue Act of 1921 grants deductions from the gross estate of the following:

The amount of all bequests, legacies, devices, or transfers, * * * to or for the use of any domestic corporation organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, * * * no part of the net earnings of which inures to the benefit of any private stockholder or individual, or to a trustee or trustees exclusively for such religious, charitable, scientific, literary, or educational purposes within the United States.

It is clear that the testator bequeathed nothing directly to the organizations listed in the findings of fact, and so the amounts claimed are deductible only if it can be found that they were bequests to a trustee for those organizations. No trust was created by the will itself as it does not designate the beneficiaries. ; . The letter addressed by testator to his wife and found among his effects after his death can not be taken as a part of the will under the law of New York (; , and so it can not be used to supply what the testator omitted.

It is also very doubtful whether the letter would be admissible, over objection, to show the testator's intention (, but inasmuch as it had been set out as a part of the petition, and the respondent has admitted the existence and finding of it and its terms as pleaded, it was apparently intended by the parties that we should consider it as a part of the case. We have, therefore, set forth in the findings of fact the pertinent parts of the letter. A reading of the parts quoted in connection with the will shows beyond a doubt that it was not the intention of the testator to create any trust in respect of the amounts which his widow gave to the exempt corporations. It is said in ; affirmed , that:

An expression may be imperative in its real meaning, although couched in language which is not imperative in form; and, when it appears to have been used in this sense by the testator, the courts will give it due effect. If it is used by way of suggestion, counsel, or advice, with a view to influence but not to direct the discretion of the party, it will not raise a trust. Although a devise or bequest to one person, accompanied by words expressing a wish, entreaty, or recommendation that he will apply it in whole or in part to the benefit of others, may create a trust, if the subject and object are sufficiently certain, they will not do so unless the words appear to have been intended by the testator to have been imperative; and, when property is given absolutely and without reservation, a trust is not to be lightly imposed upon mere words of recommendation and confidence.

See also ; ; affirmed .

The fact that the widow complied with decedent's wishes does not impress a trust upon the funds she distributed.

Judgment will be entered under Rule 50.