when parties reduce their agreement to an integrated writing, parol evidence rule may prohibit use of extrinsic evidence tending to contradict or vary writing
How later courts described this case
- when parties reduce their agreement to an integrated writing, parol evidence rule may prohibit use of extrinsic evidence tending to contradict or vary writing
- a "fundamental principle of tax law [is] that State law creates legal rights and property interests while Federal law determines what, and to what extent, interests or rights, so created shall be taxed."
- discussing the Tax Court's application of the parol evidence rule
- interpretation of trust instrument
Written by the judges who cited it.
The opinion
Simpson, J., concurring: I fully agree with the majority’s conclusion that because of the legal issue presented in this case, we are required to interpret the decedent’s will in the same manner as would a State court in West Virginia. However, I wish to emphasize that our holding today does not mean that parol evidence is always to be excluded in estate tax cases. The applicability of today’s holding will depend upon the precise issue to be decided by us. For example, when we are faced with the question of whether a decedent retained for his life the "possession or enjoyment” of property within the meaning of section 2036(a)(1), 1 parol evidence will be admissible to demonstrate such "possession or enjoyment” even if the instrument, by which the decedent transferred the property, purported to deny him any rights or interest in the property, and even if the relevant State law would prevent the admission of such parol evidence. In such a case, the issue turns on the meaning of "possession or enjoyment” — Federal tax concepts which do not depend upon State law property rights or interests. See Estate of McNichol v. Commissioner, 265 F.2d 667, 670 (3d Cir. 1959), affg. 29 T.C. 1179 (1958), cert. denied 361 U.S. 829 (1959). Such concepts are concerned with actual possession or enjoyment, not with whether such interests are protected or enforceable under State law. See, e.g., Guynn v. United States, 437 F.2d 1148, 1150 (4th Cir. 1971); Estate of McNichol v. Commissioner, supra at 669; Estate of Hendry v. Commissioner, 62 T.C. 861, 871-872 (1974); Estate of Kerdolff v. Commissioner, 57 T.C. 643, 648 (1972); Estate of Barlow v. Commissioner, 55 T.C. 666, 670 (1971). Thus, whenever the legal issue presented in a case turns on a Federal tax standard, and does not turn on local law, we will continue to admit and examine all relevant evidence. There may also be other situations when we should look at all relevant evidence to carry out the purpose of a Federal tax provision, and so, the result reached in the majority’s opinion should not be regarded as one of general applicability.
Raum, J., agrees with this concurring opinion. (a) General Rule. — The value of the gross estate shall include the value of all property to the extent of any interest therein of which the decedent has at any time made a transfer (except in case of a bona fide sale for an adequate and full consideration in money or money’s worth), by trust or otherwise, under which he has retained for his life or for any period not ascertainable without reference to his death or for any period which does not in fact end before his death—
(1) the possession or enjoyment of, or the right to the income from, the property
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