Wells Fargo Bank & Union Trust Co., of the Will of Walter D. K. Gibson, Deceased v. United States

245 F.2d 524 WELLS FARGO BANK & UNION TRUST CO., Executor of the Will of Walter D. K. Gibson, Deceased, Appellant, v. UNITED STATES of America, Appellee. No. 15046. United States Court of Appeals Ninth Circuit. May 6, 1957. Rehearing Denied June 4, 1957. 1 COPYRIGHT MATERIAL OMITTED Morrison, Foerster, Holloway, Shuman & Clark, Franklin C. Latcham, W. T. Fitzgerald, Clarence E. Musto, San Francisco, Cal., for appellant. 2 Charles K. Rice, Asst. Atty. Gen., George Lynch, Lee A. Jackson, I. Henry Kutz, Davis W. Morton, Jr., Attys., Dept. of Justice, Washington, D. C., Lloyd H. Burke, U. S. Atty., San Francisco, Cal., for appellee. 3 Before POPE and FEE, Circuit Judges, and EAST, District Judge. 4 EAST, District Judge. 5 This action was brought in the District Court for the Northern District of California, Southern Division, under Section 1346(a) (1), Title 28, U.S.C.A., for the refund of certain income taxes alleged to have been erroneously assessed and collected. 6 The main facts are not in dispute and were the subject of stipulation in the District Court. 7 The Appellant is the Executor of the last Will and Testament of Walter D. K. Gibson, deceased, who died on December…

This action was brought in the District Court for the Northern District of California, Southern Division, under Section 1346(a) (1), Title 28, U.S.C.A., for the refund of certain income taxes alleged to have been erroneously assessed and collected.

The main facts are not in dispute and were the subject of stipulation in the District Court.

The Appellant is the Executor of the last Will and Testament of Walter D. K. Gibson, deceased, who died on December 21, 1938 (Decedent). The estate of Decedent (Walter’s Estate) was in the course of administration from January 11, 1939 to August 26, 1941, when it was distributed under decree of final distribution. However, Appellant was not discharged as Executor.

Decedent’s will was executed on August 31, 1937. 1 Contemporaneously *527 with the execution of Decedent’s will, Emily A. Gibson, wife of Decedent (Emily), executed a waiver of her right to claim one-half of any part of the community property of the spouses involved and agreed to accept the terms of Decedent’s will. 2

Statement of Facts

The Decedent’s ultimate estate under the will was composed entirely of community property of himself and Emily and his estate was ultimately…

(dissenting).

Bishop v. Commissioner, 9 Cir., 152 F.2d 389 , should be read in the light of its own facts. The key to that decision is found in the following statement therein (at page 391): “The Tax Court appears to have assumed that, upon decedent’s death, petitioner’s half of the community property ceased to be hers and became a part of decedent’s estate. The assumption is incorrect. Petitioner’s half, like decedent’s half, was subject to administration, but, unlike his half, her half never became a, part of his estate.” (Emphasis mine.)

In contrast to that situation the facts here are quite different. For, whatever the theory behind them, the California decisions make it plain that an arrangement like this one makes the property all pass under the husband’s will; all the property became a part of his estate. The general statement in the Bishop case that “ownership is the test of tax-ability” is a good enough rule for most cases, and unobjectionable when used in that case where “her half never became a part of his estate.” But when sought to be applied to the far different facts here, that statement is not only demonstrably wrong, but contrary to the express terms of the…