This is an action to recover an estate tax alleged to have been overpaid by plaintiff-taxpayers as a result of an erroneous deficiency assessment made by the defendant upon the Estate of H. G. Geyer, Deceased. Facts are alleged and admitted by the pleadings from which it appears that plaintiffs are justified in instituting the instant action and that this District Court has jurisdiction thereof under Section 1346(a) (1) of Title 28 U.S.C.A.
The facts are not in dispute. H. G. Geyer died testate in Neosho, Missouri, on February 10, 1954, leaving a surviving widow, Beulah M. Geyer. Plaintiffs herein, as Trustees and Executors of that decedent’s estate, paid to defendant, $7,205.07, the amount asserted by them to be due from said estate as federal estate taxes. The Commissioner of Internal Revenue assessed an estate tax deficiency against the plaintiffs in the amount of $1,954.15, and interest thereon in the amount of $275.18. Such amounts were paid by plaintiffs on July 15, 1958, and August 29, 1958, respectively. On January 5, 1959, plaintiffs filed a claim for a refund and made demand for return of the same. Their claim was refused by defendant on May 27, 1960, within less than one year from the date of filing of the instant action.
The basis for the claimed refund is two-fold:
(1) It is plaintiffs’ contention that under paragraph 5 of the will of deceased, decedent’s wife, Beulah M. Geyer, was granted a fee simple title to the real estate therein described and that the bequest, therefore, qualifies for a marital deduction under Section 812(e) (1) (A) of the 1939 Code (26 U.S.C.A. § 812(e) (1) (A), 1952 ed.)
(2) It is alternatively contended that, even if the wife took only a life estate in such real estate, the terms of the will additionally conferred upon her a power *59 to sell, which constitutes a “power of appointment” that qualifies the bequest for a marital deduction under the exception to the terminable interest rule, provided for in Section 812(e) (1) (F) of the 1939 Code, as amended by Section 93(a) of the Technical Amendments Act of 1958. Pub.Law 85-866, Sept. 2, 1958, 72 Stat. 1668.
It is defendant’s contention that by the terms of the will of deceased, the interest in the realty taken by decedent’s wife is limited in such a manner that it fails to qualify for a marital deduction under either of the subsections cited by the plaintiffs as above but, rather, constitute a non-deductible terminable interest, within the purview of Section 812(e) (1) (B) of the 1939 Code. 26 U.S.C.A. § 812(e) (1) (B), 1952 ed.
The real estate here in question was the “home place” of deceased and his wife, at the time of the former’s demise. The value thereof was $8,000 on February 10, 1954. (Stip. 10-28-60.) The deficiency tax and interest thereon was assessed on the basis of that valuation; and that the marital deduction did not apply to the bequest of the home place made to decedent’s widow. The pertinent part of the will of decedent, H. G. Geyer, provides as follows:
“(5) To my wife, Beulah M. Geyer, I give and devise the home place at 317 Patterson Street in Neosho, Missouri * * *.
“She shall have good and full right to sell and convey fee simple title thereto, with such easements as are appurtenant, and not account for the proceeds thereof. If she shall not have sold the same at the date of her death, then the title to same shall pass to those of the above-named children who shall be alive at that date. Neither spouse nor children of any deceased child shall take any interest therein.
“(10) All of the balance of my estate, real personal and mixed, and wherever situated, shall be held in trust by my above-named executors and trustees for the purpose of managing and collecting the same.”
The Issue
Whether such devise of “the home place” to decedent’s wife, with “good and full right to sell and convey fee simple title thereto, with such easements as are appurtenant, and not account for the proceeds thereof,” qualifies for a marital deduction, as the plaintiffs alternatively contend; or is it a non-deductible terminable interest, as the District Director contends, under applicable statutes and Treasury Regulations relating to marital deductions.
There is no difference between the parties as to the proper construction to be given to the applicable statutes and Treasury Regulations, except in one minor instance; and that, whether Treasury Regulation 20.2056(b)-5(3) correctly interprets the corresponding provisions of the 1954 I.R.C. (§ 2056(b) (5), 26 U.S.C. § 2056(b) (5). As to that matter: It is not deemed necessary to a decision here that this Court be concerned with such contention, nor encumber this memorandum by any discussion thereof. A decision of the salient issue here does not appear to hinge on the construction to be given to applicable statutes and regulations; but depends upon the proper interpretation to be given the will of H. G. Geyer, deceased, under applicable law. Both parties agree that the law of Missouri is apposite to a determination of that proposition.
It is the plaintiffs’ contention that under Missouri law the wife of H. G. Geyer, deceased, acquired a fee simple title to the property bequeathed by paragraph 5 of his will, supra, and hence the value of such property is entitled to be claimed as a marital deduction under § 812(e) (1) (A) of the 1939 Code, supra. This, on the authority of Vaughan v. Compton, Mo.Sup.,
An open analysis of the Missouri authorities above cited will not be undertaken. The curious may follow their own inclination to that effect. Suffice it to say that in the Presbyterian Orphanage case, supra, the Supreme Court of Missouri, in construing a bequest in general terms [
“The rule they (the cases) establish is that a devise of land, not limited in any way as to duration or enjoyment, with an absolute power of disposition by sale, gift, or otherwise, by deed or will at the pleasure of the devisee, must be construed to give a fee; but that a devise limited to enjoyment of the rents and profits of land, which is followed by a devise of the premises, as the testator’s property, after the death of the devisee to whom he gave the right to enjoy the rents and profits thereof, must be construed to create a life estate in such first devisee. Furthermore, when a life tenant is given a power ‘to sell and dispose’ under such a provision, the power must be construed as a power of disposition for a valuable consideration.” 114 S.W.2d loc. cit. 1007.
In the light of that and other cited Missouri authorities, we are led to the conclusion that by the devise here considered, when H. G. Geyer, deceased, after giving his wife the right to “sell and convey” the home place “and not account for the proceeds thereof,” but coupled such general grant with the limitation that “if she shall not have sold the same at the date of death, then the title to same shall pass to those of the above-named children who shall be alive at that date,” the wife did not obtain a right of disposition by will. All she received thereby was a life estate, coupled with a power of sale during her life. Since the property, if it remained unsold, would not pass as a part of the wife’s estate nor be subject to her testamentary disposition, it is clear that she did not receive such a fee as could be claimed a deduction under Section 812(e) (1) (B) (ii) of the 1939 Code, supra.
As to plaintiffs’ second contention, defendant disallowed the marital deduction here claimed, on the grounds that decedent’s wife did not have a power to “appoint” the real estate in question, as required by Section 812(e) (1) (F) of the 1939 Code, supra, as amended by the Technical Amendment Act of 1958, supra ; because the life estate devised to her is not terminable by her “alone and in all events.” The main thrust of that position may be stated thus: set against the standard prescribed by the above-cited section of the Code and Treasury Regulations promulgated pursuant thereto, defendant asserts that the nature of the wife’s interest here considered fails to fulfill the conditions necessary to have Section 812(e) (1) (F), supra, apply in *61 this estate’s favor, because the wife’s interest is limited to a life estate, coupled only with a power of sale; that to qualify for a marital deduction the power must be more than a power of sale; it must be an absolute power of disposal, i. e. exercisable in any manner and in all events by the surviving spouse alone, to whomsoever she pleases, whether exercisable by will or during life. Being limited to a power of sale only, defendant says: “Property may be disposed of in many ways; among others, it can be wasted, squandered, given away, placed in trust, sold, or set aside for testamentary disposition.” (Tr.Br., p. 15.) Hence, defendant interprets paragraph 5 of deceased’s will as giving the wife the power to dispose of the real property in question in only one manner, by sale. This will is not subject to that interpretation under Missouri law.
As in other jurisdictions, the cardinal rule in Missouri with respect to the construction of wills, is that the courts shall have due regard to the intention of the testator which will be carried out unless it conflicts with public policy or positive law. Section 474.430, V.A. M.S.; Vaughan v. Compton, supra; Housman v. Lewellen, supra; Jackson v. Littell, supra. In so doing, what was said by the Missouri Supreme Court in Shelton v. Shelton, supra, should be kept in mind, namely:
“The language of one will is rarely, if ever, like another and frequently a slight difference in the words used calls for different constructions of testamentary provisions similar in- other respects. Even identical words properly receive diverse interpretations when used in contexts or under circumstances which are not the same. Therefore, decisions construing similar testamentary provisions are of small value as precedents and must be considered with caution.”155 S.W.2d 187 -188.
Hence Missouri decisions construing devises by will, as is true in most all other jurisdictions, can be nothing more than persuasive and not binding authorities as to the proper interpretation to be given to the provisions of any given will. No Missouri authority cited by the parties relates to a will that contains a provision for a “devise (of) the home place” to a wife with “full right to sell and convey fee simple title thereto, with such easements as are appurtenant, and not account for the proceeds thereof” by the wife. Such a devise of a “home place” is not one limited to “enjoyment of the rents and profits” thereof which is followed by a devise of the premises, with power “to sell and dispose” of, as was considered in Presbyterian Orphanage v. Fitterling, supra, or any other Missouri cited case.
The instant devise is one that vests the life tenant with an outright power to “sell” which, if exercised, connotes in and of itself the execution of a “deed of conveyance.” 79 C.J.S., p. 1033, note 86; Harrison Central Corporation v. United States, D.C.N.J.,
Under paragraph 5 of this will, supra, the wife could sell the “home place” for $1 and transfer title in respect thereto. If she did so, the same would not be a true sale. Such a transfer of title could be intended to be made by her as a gift. Cf. Aldridge et al. v. Aldridge et al.,
Plaintiffs are legally entitled to recover a refund of the estate taxes here claimed. Counsel prepare judgment entry accordingly.
It is so ordered.