*1 S86 construction, room the no question whether left concerned with the application principle are cited to upon final con- of this we trusts effective became distinctions, none, the no only when and know of between or sent of creditors Michigan to York was transferred New law. property of the estate immaterial It is the trustees. is decree below affirmed. Company was of Trust nominal status changed the estate of creditor beneficiary trust. The to that of respect obligations wa.s in status of the required by the are changed. The trustees instruments, to “make terms payments the trust upon the way dividend proportion to of the creditors claims The creditors respective interests.” com- required appoint creditors’ to are mittee CO. v. COMMISSIONER EXPRESS PUB. operations supervise which is to OF REVENUE. INTERNAL trust, specified powers No. 10973. duties, declared “creditors” are Appeals, creditors Fifth Circuit. who were Court defined to be those deceased, Waters, the date of Dudley E. July 6, 1944. been death, claims have whose provided It against his estate. allowed in the benefits shall share creditors proceeds and income of the trust proportion to the amount property, in itsof remaining from time their claims
.of subro- unpaid. The are trustees any creditor, who gated right full, against any joint paid in has been upon and' when obligor debt shall cease to in full such creditor trust. one of the beneficiaries Company, Trust as a benefi agreements, ciary, given trust every right against the estate that trust prior against estate decedent’s it rights trusts. Its formation right included the against the decedent liability release Brewer from law, note, then to New York according applicable. unquestionably It rights bank’s reservation true estate, against the Waters’ contained release, without the con the Brewer legatees creditors of other sent parties to will. All the trust Waters the agreements consented, reservation, without trust perpetuation of each to the against Accept right the estate. creditor’s classification, appellants’ insofar questions may arise includes language in a meaning of in trust strument, ambiguity perceive no we declarations, agreements present trust latent, obvious or either raises impairment question of or diminution in creditor, by rights change reason the in In the beneficiary. status nominal ambiguity- absence of there such'
387 petitioner. found that The personal Mrs. Frost rendered rea- $1,000 sonably Mrs. per year, worth but Brown These conclusions rendered none. are contended erroneous proven facts, as- and an of law is error serted in rejection evidence as to the reasonable of the services. value petitioner The Tax Court finds that published many years for two leading newspapers Texas, in southwest gross of from income one and half annually, million to two million de- dollars principally rived from advertising, about 75 percent of which was of a character appeal to women. The Frank Huntress, G. salary $25,000 received a per year, and Secretary and the Treas- $5,400 per year. urer each Mrs. Frost been First Tax Court finds she is a woman of in- telligence, personality courage, and moral familiar with the business and policies petitioner adopted by and car- through history; ried out its as First Vice- President she was over take perform president the duties of inability case of the presi- act dent; personal she does not maintain a office petitioner in the offices of but attends meetings approximately directors’ petitioner’s twice a month comes to offices for discussion of matters business and policy operation papers. She subject petitioner. to call Mrs. As to says, Brown is the sister of she Mrs. Frost and succeeded her husband as director and Second Vice-President on woman, death intelligent in 1925. is an She Frost; but able and forceful Mrs. her away; home several miles hundred Denman, Antonio, LeRoy G. San she peti- maintains no business office with Tex., petitioner. for only monthly tioner and attends meet- Carloss, Key, Helen R. Sewall A. F. ings spe- any board of Prescott, Avakian, Spurgeon Sp. Assts. meetings cial of which she notified. The Gen., Clark, Atty. Jr., Samuel Asst. O. holdings court finds that the stock Mrs. Atty. Gen., Counsel, Wenchel, P. Chief J. small, Frost and relatively Mrs. Brown are Rev., Morawski, Int. M. Bur. and John disguised and the divi- Sp. Atty., Bur. Washing- Int. Rev., all dends. Tax Court concluded that Mrs. ton, C., appellee. D. for Frost, capable experienced, giv- SIBLEY, HUTCHESON, Before and ing petitioner’s business, ren- LEE, Judges. Circuit personal dered services “over above corporation”, of a director of those SIBLEY, Judge. for be de- tax petitioner On income returns for expense. and ducted as a business Commissioner only disallowed As to Mrs. Brown it “The as busi- held ac- expenses per ness salaries of $261.25 month tual services she paid per Mrs. S. Carrie Frost attending $166.25 a director paid Dorsey month W. meetings monthly special Brown as of the board First and meetings Second Vice-President of which advised. she * * * press expert- opinion, not es- does Certainly record the standard being sal- part ness on any tablish ary value she high performed actually Amer.Jur., Evidence, one. she subsecs, 901; 32 *3 Evidence, 545, deduction vice-president”. C.J.S., No as second § (a) (b). opinion It is here true that the was her. allowed as to given goes question the very “reason recognize We that answer, general is to and this in deducted for salaries” to be able allowance ought allowed, in not to ruled be as we Rev Internal expense aas business States, Hamilton v. 357, 73 F.2d United Cir., (1) (A), 26 U.S. Code, Int.Rev.Code, 23(a) Sect. enue recognized 358. that But decision (A), 23(a) (1) C.A. § objection good: always that not was Tax Court’s usually question fact, a opinion may “Oftentimes an be received evidence, which, should on determination simple issue, on a ultimate even when however, think, disturbed. We be one, example is the sole as for where law a in error as matter Tax Court is article, issue is the value an supposing allowances in that sanity person; of a be it cannot because service here must rest on1 fully simplified further be and cannot Vice-President, with First and Second as hearing opinions tried without in di of that rendered no consideration position in better to form them than the meetings. A is an officer director rectors’ jury placed can ef- be in.” To same may him for pay and it corporation, of a fect, question value, 20 Am. on a see responsi serving assumes such. He Jur., Evidence, Evidence, 890; C.J.S., § creditors for and to stockholders bilities diligence, judges think so well We great be and advice supervisory able in the to value service case, as In this business. value has been newspaper long business who has as one stated, was clientele female it, engaged opinions of in such directors, both women courted and these considered, might helpfully though of intelligent, were experienced them binding, testimony course not as sworn figureheads. Mrs. presumably not mere a fact would be. necessary Brown, giving the time besides judgment accordingly We set the of the deduc- aside hundred miles to to travel about five direct reconsideration neces meetings, incurred from directors’ salaries, parties tion for with leave to the expense, not shown sarily which is touching offer further evidence than reimbursed otherwise to have been in her services rendered and their salary. think We value. in consider law not erred in matter of estimating the in ing Judgment service as reversed. salaries. reasonableness of these Judge HUTCHESON, (concur- Secretary and Testimony of the ring specially). was offered to the President Assistant majority said, I in concur opinion Mrs. Frost salaries in his my opin- I should like to in reasonably but ion the Tax Court erred in not add that were neces Mrs. Brown and sary recogniz- was a procure their ing Brown who been a outlay. had reasonably necessary testified He actually per- did newspaper business had been he having form participated name stand- hiring since corporation masthead of a paper. There persons for the to work arbitrary character. I think it this was employees he from 350 a finding fiat and not for the Tax during of fact participated fixing salaries judgment Court to substitute for that familiar years, the paid and was management busi determine for services Vice-President, standing years ness; other in thus and there motive willing discharge ready, able and fixing of these than the salaries women duties of that office of the office of their services. to obtain reasonableness was that “it was swer”. We disability rejected if absence or ground performance, Mrs. Brown called her to that must an the court rendering service to the think ad was evidence was adequately she should for which missible. witness ex-