This is a petition to review an order of the Board of Tax Appeals (
The facts out of which this controversy arises are stipulated. A detailed statement of them would be more confusing than helpful. It is enough to say that, at the time of C. G. Irvine’s death, May 14, 1932, there was personal property held by him and his wife as joint tenants, of the value of $34,527.03, consisting of corporate stocks of the value of $32,266.25, and bank account $2,260.50, and that the only property belonging to him individually was 25 shares of stock, worth $153.25, and a savings account of $30.28; that up to that time 'no deficiency in income taxes for the year 1929 had been assessed, the deficiency assessment being made on July 16, 1932, pursuant to a waiver executed by the taxpayer on February 16, 1932; that the Commissioner, being unable to collect this deficiency assessment from the estate of the deceased, assessed it against the petitioner as a transferee of his estate; that, from the determination of the Commissioner that she was liable for the tax, she appealed 'to the Board, denying her liability for her husband’s unpaid income taxes for the year 1929 as a transferee within the meaning of Sec. 311.
The petitioner admits her liability for the deficiency to the extent of $183.53, the value of the property owned by her husband individually at the time of his death. As to the rest of the property, she contends that she is not a transferee within the meaning of Sec. 311, and that she acquired that property as a surviving joint tenant, free of all her husband’s debts and obligations.
The respondent makes three contentions :
(1) That $7,600 worth of the stocks held in joint tenancy, which became the petitioner’s upon her husband’s death, were owned by him individually in 1929; that he transferred these shares to himself and wife as joint tenants, but that, since his interest in them was acquired when they were originally purchased and her interest was acquired by the subsequent transfer, the tenancy lacked unity of time and title, so that it was not a joint tenancy, but a .tenancy in common; that, therefore, upon his death, C. G. Irvine owned an undivided one-half interest in these shares, which became a part of his estate and went to his wife as a distributee, and not as a surviving joint tenant.
(2) That, assuming the validity of the joint tenancies, the petitioner is, nevertheless, liable as a transferee under the trust fund doctrine, because these tenancies were created in 1929 and 1930, constituted transfers which were presumptively fraudulent, and resulted in rendering the estate of C. G. Irvine insolvent.
(3) That the enlargement of the petitioner’s interest in the joint tenancies from an undivided one-half interest to the whole interest in the property by reason of the taxpayer’s death, constituted a transfer to the petitioner of her husband’s undivided interest in the property and made her a transferee within the meaning of Sec. 311.
We shall consider the respondent’s contentions in their order.
1. Relative to the stocks which the respondent contends should not be regarded as being in joint tenancy at the time of Mr. Irvine’s death, the respondent points out that such shares were acquired by Mr. Irvine individually through his brokers between September 11, 1929, and January 29, 1930; that until June 13, 1930, no transactions occurred with respect to these shares, except a change on the books of the brokers of Mr. Irvine’s trading account to C. G. Irvine and Mrs. Myrtle M. Irvine as joint tenants; that on June 13, 1930, some of these shares were withdrawn from the *267 brokers, and when they were redeposited with the brokers on June 29, 1930, new certificates were procured in the name of “C. G. Irvine and Myrtle M. Irvine, as joint tenants”; that the other shares were, on'June 29, 1930, held in the name of the brokers, but were, afterwards and prior to the death of Mr. Irvine, reissued in his name and that of his wife as joint tenants.
It is conceded that joint tenancies may, under the laws of Minnesota, which are here controlling, be created in personal property (Peterson v. Lake City Bank & Trust Co.,
The respondent argues that, with respect to the creation of the joint tenancies in the shares of stock which originally stood in the name of Mr. Irvine alone, the unities of time and title were absent, for the reason that Mr. Irvine acquired his interest at the time the stocks were originally purchased by him, while the petitioner acquired her interest either at the time the brokers’ account was changed to a joint account or at the time the stock certificates were reissued to the petitioner and her husband, as joint tenants. This argument finds support in Breitenbach v. Schoen,
Deslauriers v. Senesac,
The Minnesota case most closely analogous to this is Peterson v. Lake City Bank & Trust Co., supra,
And further said:
“By the transaction Mr. and Mrs. Peterson acquired the same interest in the bonds, such interest accrued in the single transaction, the interest of each commenced at the same time, and the property was received and held by one and the same un *268 divided possession. The right of survivor-ship was present. The presence of such elements constitutes a joint tenancy. From the viewpoint of a layman the right of survivorship is the principal characteristic of a joint tenancy. That is what made a joint tenancy attractive to the parties to this transaction. That was the goal which they mutually sought.
“A joint tenancy may exist in personal property and it may be established by parol, though here there is supporting documentary, evidence.”
The respondent argues that, because the Supreme Court of Minnesota pointed out that the four unities were' present in the Peterson Case and that “the presence of such elements constitutes a joint tenancy,” it would hold, with respect to the joint tenancies here in question, that the four unities were not present, and that the absence of the unities of time and title would render invalid these joint tenancies. This, we think, does not follow. It is our opinion that the Supreme Court of Minnesota would rule that when C. G. Irvine procured the stock certificates to be issued to himself and Mrs. Irvine as joint tenants with right of survivorship, he sufficiently satisfied the requirements of the four unities, since the certificates evidenced the creation of the joint tenancies and the intent that the right of survivorship should exist. From our examination of Minnesota cases which bear upon the question, we gather that the most important element of a joint tenancy, in personal property at least, is the intent of the creators that the right of survivorship shall exist. McLeod v. Hennepin County Savings Bank,
In Edmonds v. Commissioner, 9 Cir.,
“Petitioner argues that a person cannot convey title to himself, because he is unable to make delivery to himself; that if a person conveys property to himself and another as joint tenants, what he has done is to convey an undivided half interest; that since the grantor and grantee acquire their respective interests at different times, and that of the grantor, when acquired, was not the same as that which the grantee acquired, there is neither unity of title, nor unity of time, and therefore no joint tenancy. This technical view is followed in Breitenbach v. Schoen,
“However, the weight of authority is opposed to that view. Ames v. Chandler,
While the exact question is, perhaps, still open in Minnesota, we believe that the Supreme Court of that State would follow the weight of authority, rather than adopt the technical view contended for by the respondent. We are of the opinion that the joint tenancies here in question were valid.
2. The second contention of the respondent finds no evidentiary support in the record. The record conclusively shows that C. G. Irvine was at all times solvent, that the creation of the joint tenancies did not make him insolvent, and that he could not have had any intent to hinder, delay or defraud his creditors. In fact, the record fails to show that, during his lifetime, C. G. Irvine had any debts of which he was aware. He was free to dispose of his property in any way that he saw fit. McDonald
*269
v. Williams,
3. Sec.. 311 of the Revenue Act of 1928, 26 U.S.C.A. § 311, does not create the liability of a transferee, but provides the Government with a new remedy for enforcing an existing “liability, at law or in equity.” Phillips v. Commissioner,
In Liquidators of Exchange Nat. Bank v. United States, supra, 5 Cir.,
What this means in the case at bar is that, if the petitioner received from her husband, at his death, property which was legally chargeable with his debts, the Commissioner could rightfully assess a deficiency in the income taxes of her husband against her as a transferee of his property. But the property which the respondent seeks to subject to the payment of the deficiency in income taxes of C. G. Irvine was not acquired by the petitioner through his death, but as a surviving joint tenant under tenancies created prior to his death.
The rule is that a surviving joint tenant becomes the absolute owner of the property held in joint tenancy, upon the death of the 'cotenant, free of the claims of the heirs or creditors of the deceased. 14 Am.Jur. page 80; Musa v. Segelke & Kohlhaus Co.,
The conclusion which was reached by the Board of Tax Appeals in this case is opposed to its decision in Smith v. Commissioner,
The Board reached the conclusion in that case that the surviving tenant was not a transferee of the decedent.
Survivorship is a characteristic of both a tenancy by the entirety and a joint tenancy, United States v. Robertson, 7 Cir.,
The order of the Board, in so far as it imposes liability upon the petitioner in excess of $183.53 for the unpaid income taxes of her husband for the year 1929, is erroneous and is therefore reversed.
Notes
§ 311. Transferred assets.
“(a) Method of collection. The amounts of the following liabilities shall, except as hereinafter in this section provided, be assessed, collected, and paid in the same manner and subject to the same provisions and limitations as in the case of a deficiency in a tax imposed by this title (including the provisions in case of delinquency in payment after notice and demand, the provisions authorizing distraint and proceedings in court for collection, and the provisions prohibiting
claims and suits for refunds):
“(1) Transferees. The liability, at law or in equity, of a transferee of property of a taxpayer, in respect of the tax (including interest, additional amounts, and additions to the tax provided by law) imposed upon the taxpayer by this title [chapter],
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“(f) Definition of ‘transferee.’ As used in this section, the term ‘transferee’ includes heir, legatee, devisee, and distributee.”