The opinion of the court was delivered by: LEVET
Opinion, Findings of Fact and Conclusions of Law
This action is brought by plaintiff, Ann F. Frank, individually and as Executrix of the Estate of Martin M. Frank, deceased, under Title 28 USC § 1346(a)(1), as amended, to recover certain sums allegedly erroneously assessed as tax deficiencies and collected on a joint income tax return of Martin M. Frank (now deceased) and Ann M. Frank for the year 1958 in the amount of $12,666.84.
The sole issue presented is whether the sum of $27,247.96 paid to Martin M. Frank by Dr. Simon Philip Goodhart from the residuary estate of decedent, Bertha Wolff Goodhart, was a gratuitous transfer or gift which was not includable in income or subject to taxation.
After hearing the testimony of the parties, examining the exhibits, the pleadings, the briefs and Proposed Findings of Fact and Conclusions of Law submitted by counsel, this court makes the following Findings of Fact and Conclusions of Law:
1. In and about early August 1950, Dr. Simon Philip Goodhart and Mrs. Goodhart (Bertha Wolff Goodhart) requested Roy M. Cohn to draw their Wills but Cohn took them to another lawyer, one Edwin Weisl of Simpson, Thatcher & Bartlett, who prepared their Wills.
2. On or about August 1, 1950, Martin M. Frank, now deceased, and Roy M. Cohn signed a letter, prepared by the office of the Goodharts' attorney, addressed to Mrs. Simon Philip Goodhart (Bertha Wolff Goodhart), which read as follows:
"We understand that you are about to execute a will in which you are naming us as alternate executors and as trustees.
"We hereby agree that if we both qualify as executors and/or trustees under said will or under any future will which you may execute, our joint compensation shall, during such period as we both continue to act in such capacity, be limited to the compensation payable to a single executor and/or trustee under the laws of the State of New York from time to time in effect.
The execution of this letter had been preceded by conversations of Frank and Cohn with Dr. and Mrs. Goodhart and the attorney, Edwin Weisl, who was drawing the wills of Dr. and Mrs. Goodhart.
3. On March 11, 1955, Bertha Wolff Goodhart, wife of Simon Philip Goodhart, died, leaving a Last Will and Testament, executed on August 3, 1950, in which decedent's husband, said Simon Philip Goodhart, was designated as sole Executor and Martin M. Frank, Roy M. Cohn and Bankers Trust Company were named as Trustees of certain trusts created by said will.
4. Said will of said Bertha Wolff Goodhart was duly admitted to probate in the Surrogate's Court of New York County, State of New York, on April 5, 1955, and Letters Testamentary were thereon duly granted to Simon Philip Goodhart on April 5, 1955. John M. Foley was the attorney for the Estate.
5. By Paragraph Twelfth of said will, the testatrix, Bertha Wolff Goodhart, provided that: "If for any cause he [i.e., Simon Philip Goodhart] should not act or continue to act as such executor, then I appoint as executors in his place and ...