The opinion of the court was delivered by: LEVET
This is a tax refund action. Plaintiff alleges the erroneous and illegal collection of certain estate taxes. The facts have been largely stipulated, and are set out at length in a prior opinion in this case, 249 F. Supp. 450 (60 Civ. 1744, S.D.N.Y., January 5, 1966). The prior opinion, on motions by both parties for summary judgment, determined all of the issues in this action, with one exception. The prior opinion determined that the promise of decedent, William Deering Howe, to leave one-third of his net estate to his daughters, was a "claim" against the estate "founded upon a promise or agreement" within the meaning of Section 812(b), Internal Revenue Code of 1939 (now Sections 2053, 2043(b), Internal Revenue Code of 1954). The prior opinion further determined that the estate was entitled to a deduction from the gross estate to the extent that the promise of decedent, William Deering Howe, was contracted "for an adequate and full consideration in money or money's worth." Section 812(b), Internal Revenue Code of 1939. Various possible bases of such consideration were discussed, and all but one were rejected. The prior opinion held, however, that a genuine issue of material fact existed as to whether Paragraph 6 of a separation agreement which had been entered into by decedent and Polly Brooks Howe, then his wife, furnished any "consideration in money or money's worth" for decedent's promise to leave one-third of his net estate to his daughters, and, if so, the amount of such consideration.
The prior opinion in part held:
"* * * The estate is entitled to a deduction from the gross estate only to the extent that consideration in money or money's worth was furnished by Paragraph 6 of the agreement.
"Trial will be limited to the single issue of the amount of consideration in money or money's worth, if any, which was furnished for the promise of decedent William Deering Howe to leave one-third of his net estate to his daughters by the promise of Mrs. Howe in Paragraph 6 of the separation agreement.
"Proof at trial should include data bearing on the reasonable needs of the daughters during the continuance of their minority, the life expectancy of Richard F. Howe on August 14, 1941, the income of the trust in the years and months preceding August, 1941, and the expectations on August 14, 1941 of the future income from the trust."
(249 F. Supp. 450, 60 Civ. 1744, S.D.N.Y., January 5, 1966).
However, a stipulation dated January 24, 1966, entered into by the parties to this action, after reciting a portion of the language quoted above, in part provided:
"IT IS HEREBY STIPULATED AND AGREED by and between the parties hereto that plaintiff, Chemical Bank New York Trust Company, as Executor of the Estate of William Deering Howe, Deceased, offers no additional proof with regard to the above-described issue, and can offer none.
"IT IS FURTHER STIPULATED AND AGREED by and between the parties hereto that the above-described issue is hereby submitted to the court for its determination based solely upon the proof before the court on the motions for summary judgment which were determined by said opinion of January 5, 1966."
In light of the above, and after reviewing all of the evidence, pleadings and briefs in this case, the court makes the following Findings of Fact and Conclusions of Law:
1. All facts as stipulated which were set forth in the opinion of January 5, 1966 are hereby incorporated herein and found as facts.
2. The promise of Polly Brooks Howe contained in Paragraph 6 of the separation agreement, set out above, furnished no consideration in money or money's worth for the promise of decedent, William Deering Howe, ...