191 A. 162 | Pa. | 1937
Argued January 26, 1937. The question here to be met is whether the transfers of two funds by Lewis D. Krause in his lifetime to Albright College, School of Theology of the Evangelical Church, Reading, Pa., are liable to the transfer inheritance tax. The court below held they are.
The tax is imposed by the Act of June 20, 1919, P. L. 521, as amended, the latest amendment being made by the Act of July 14, 1936, P. L. 44,
Was the gift before us made in contemplation of death? It is not argued that it was. Was it intended to take effect in possession at or after death? Possession of the fund by the donee was complete before the death of the donor. Was enjoyment of the fund postponed until death or thereafter? This is the concrete question in the case.
The donor, in consideration of the two gifts, one of $35,000 and the other of $5,000, received in return two similar writings, the material parts of one of which is as follows: "Whereas, Lewis D. Krause of Allentown, Penna., has given to the Albright College, School of Theology of The Evangelical Church, Reading, Pa., the sum of thirty five thousand dollars. Now therefore, the said Albright College, School of Theology of The Evangelical *481 Church, Reading, Pa., in consideration thereof, hereby agrees to pay to said Lewis D. Krause during his natural life an annuity of six (6) per cent, in semi-annual payments of one thousand fifty dollars each, said payments to cease on the death of said Lewis D. Krause and the said sum donated by Lewis D. Krause, as aforesaid, is to be considered as an executed gift to said Albright College, School of Theology of The Evangelical Church, and belongs to said Albright College, School of Theology, from this date without any account or liability therefor." This writing was signed by the Treasurer of the College.
Looking at this document we see that the donor "has given" the fund to the donee that "the said sum donated is to be considered as an executed gift" to the college and "belongs to" the college "from this date without any account or liability therefor." In view of this plain language, it is difficult to see how it can be correctly said that the college did not have the "enjoyment" of the gift. It is obvious that the donor could not have taken the fund away from the college. He retained no interest either in the fund itself or in the income therefrom.
It is argued by the Commonwealth that because an annuity, equal to six per cent annually on the principal of the gift, was to be paid to the donor, enjoyment of the fund did not pass to the college until the giver died. But the writing says that it did, that the gift was an executed one when made, and belonged to the recipient "from this date without any account or liability therefor." There was no restriction on what the college could do with the money. It could do with it as it pleased. The money has been mingled with the general funds of the college, and is not held by it separate and intact. It was not the fund which was liable for the payments to the donor but the college itself.
The general principle which governs transactions such as the one we are considering was stated by Mr. Justice CLARK inReish v. Commonwealth,
We think the reasoning of the present Chief Justice inBarber's Estate,
Most, if not all, of our cases, as well as a number from other jurisdictions, adjudicating gift inheritance tax questions are cited in the briefs. We think it not necessary to review them, as most are somewhat afield in facts from the situation now before us.
Concluding, as we do, that the enjoyment of the fund given by the decedent to the college was not postponed until after his death, it follows that the gift is not taxable.
The decree is reversed at the cost of the Commonwealth. *484