# Petition for Writ of Certiorari — Estate of Duval v. Commissioner

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386416_0533%3A1

## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1946
- **Citation:** 328 U.S. 838

## Text

Iu the Supreme Ubu ty tt

1946

Ouek

Rnited States

Ocroper Term, 1945

No. L001

Estate or Erne M. DuVat, Deceased, by
Thomas M. Robinson, Jr., and Weston Shat-
tuck Robinson, as Executors of her Last Will
and Testament,

BS

Petitioners,
vs,

CoMMISSIONER OF INTERNAL REVENUE,

Respondent.

PETITION FOR WRIT OF CERTIORARI
to the United States Circuit Court of Appeals
for the Ninth Circuit
and
BRIEF IN SUPPORT THEREOF.

Cartes A. BEarpsLey,
Central Bank Building, Oakland 12, California,
Attorney for Petitioners.
Frrzceratp, Assott & BErarpsLry,
Central Bank Building, Oakland 12, California,
Of Counsel.

Subject Index

Pages

Petition for Writ of Cortionari. . oo... ccc scccteccccccecs 1
Summary and Statement of the Matter Involved........ 1
NOR SIND 6.0. sien s ase nn ees vaie Ade bhO Sams 3
Reasons Relied on for the Allowance of the Petition .... 4
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Db I o icvANGs Lead akwenskelees wr aehewevedsens 13
Cases Believed to Sustain the Jurisdiction ............. 39
RSS REED FEE RE RR NE TT ee ETT TN 41
P 4s Kp eho eenas 10
ON nic ccc cece cscceencnnssens 22
28 Cali Jur., p. 183, § BO... 2... ccc cece cen rccccnees 22
23 Cal. Jur., p. 941, § 19 ... 0... cecececeseceseeenecens 22
California Probate Code:

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Internal Revenue Code (1939) :

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Note (1941) 55 H.L.R. 255-64 2.0... .. ccc eee eee eee 16, 27
2 Parsons, CONTRACTS .......... cece cece eee eee e eens 19
1 Paul, FEDERAL ESTATE AND GIFT TAXATION:

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2 Paul, FEDERAL ESTATE AND GIFT TAXATION:

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Paul, SELECTED STUDIES IN FEDERAL TAXATION:

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Regulations 68 (1924) Art. 13(1)
Regulations 70 (1929) Art. 13(1)

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TaBLE oF TEXTBOOKS AND STATUTES CITED vii
Pages
Regulations 80 (1934) Art. 13(1) ............eeeeeeeees 29
Regulations 80 (1937) Art. 10(a) .........seeeseeeeeeees 29
Regulations 105 (1942):
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Revenue Act of 1916 (Sec. 202(a)) ...........--2000-s any. ee
Revenue Act of 1918 (Sec. 402(a)) ................0.00-, 29
Revenue Act of 1921 (Sec. 402(a)) ..............eeeeeees 29
Revenue Act of 1924 (Sec. 302(a)) .........-cccccccceces 29
Revenue Act of 1926 (Sec. 302(a)) ............- cece eeeee 29
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United States Code Annotated:
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Zengel, ‘‘The Effect of Erie Railroad v. Tompkins’’ (1939),
Se aa ee Be iw ek kd hw be bw xkaeke sabe k aces 16

ORT LiF RGIS EF EE EI OE GIB

a 2 ae

Iu the Supreme Court

OF THE

United States

Octoser TERM, 1945

No.

Estate oF EruHet M. DvuVat, Deceased, by :
Thomas M. Robinson, Jr., and Weston Shat-
tuck Robinson, as Executors of her Last Will
and Testament,

=

Petitioners,
Vs.

CoMMISSIONER OF INTERNAL REVENUE,
Respondent.

PETITION FOR WRIT OF CERTIORARI
to the United States Circuit Court of Appeals
for the Ninth Circuit.
To the Honorable Harlan Fiske Stone, Chief Justice of
the United States, and to the Honorable Associate
Justices of the Supreme Court of the United States:

SUMMARY STATEMENT OF THE MATTER INVOLVED.
Ernet M. DuVat (hereinafter referred to as the ‘‘de-
eedent’’) died on April 9, 1942. Her executors, Thomas
M. Robinson, Jr., and Weston Shattuck Robinson, filed
a Federal Estate Tax return on her estate and paid a
tax thereon of $14,302.19. (R. 14, 21.)

A deficiency was assessed on the return in the amount
of $48,214.31, based on the disallowance by the Com-
missioner of Internal Revenue (hereinafter referred to
as the ‘‘Commissioner’’) of a deduction taken by the
executors for a claim of the Bank of America, National
Trust and Savings Association (hereinafter referred to
as the “‘bank’’) against the estate in the amount of
$175,000. (R. 12-17.)

The bank’s claim was founded on the decedent’s abso-
lute and unconditional guaranty, with her sister, Mary
J. Robinson (hereinafter referred to as the ‘‘co-guar-
antor’’) of two notes given to the bank by the M. K. Blake
Estate Company (hereinafter referred to as the “‘corpo-
rate maker’’). The claim had been allowed by the executors,
approved by the Probate Court, and was an acknowledged
debt of the estate. In accordance with a plan agreed to
in March, 1943, by the executors and the bank, distribu-
tion of the estate is to be made to a testamentary trustee,
subject to the bank’s claim. The claim has not been paid
to date. (R. 21-23.)

At the time of decedent’s death, the maturity date of
the two notes was August 2, 1944. The unpaid balance of
the principal of the two notes amounted to $175,000. No
part of this amount has been paid since her death. (R. 23.)

The corporate maker and the co-guarantor were solvent
at the time of decedent’s death, and have remained so
to this time. The co-guarantor is aged, an invalid, and
confined to her home. (R. 24, 25.)

The matter involved is the correctness of the disal-
lowance by the Commissioner of the deduction taken by

ee! aa.

the executors of the bank’s claim for $175,000 against
the decedent’s estate on her contract of guaranty.

The Tax Court held that the deduction was properly
disallowed on the theory that the claim against the estate
had been waived by the bank. The Circuit Court of
Appeals recognized the claim and its deductibility, but
held that decedent had, at the time of her death, rights of
contribution, subrogation and reimbursement or rights to
rights of contribution, subrogation and reimbursement
(hereinafter called ‘‘rights over’’) against the corporate
maker and the co-guarantor of the notes, includable in
decedent’s gross estate, which were equal in value to the
elaim, thereby offsetting it in its entirety.

QUESTIONS PRESENTED.
The questions presented here are as follows:

1. Did rights over against the corporate maker and
the co-guarantor exist, under the law of the State of
California, in favor of the decedent at the time of her
death?

2. Does the principle of uniformity of taxation operate
to establish such rights over in decedent for federal estate
tax purposes when they did not exist under California
law?

3. Even assuming that such rights over did so exist,
may they be valued as an asset of the decedent’s estate in
the full amount of the guaranty claim simply because the
corporate maker and the co-guarantor are solvent at the
time?

4

4. Is there an ‘‘absurdity’’ in permitting the deduction
of the guaranty claim because the estates of numerous
co-guarantors might each claim a like deduction, so that
petitioner’s contentions, although otherwise correct, may
not succeed?

REASONS RELIED ON FOR THE ALLOWANCE
OF THE PETITION.

Three grounds are relied on as the reasons why this
Court should grant the petition for certiorari. They are

1. The Circuit Court of Appeals held that rights over
against the corporate maker and the co-guarantor existed,
under the law of the State of California, in decedent’s
favor at the time of her death, and thereby decided an
important question of California law directly contrary
thereto.

2. The Cirenit Court of Appeals failed to give proper
effect to the decisions of the United States Supreme
Court that state law creates legal interests and rights
and the federal revenue acts designate what interests or
rights so created shall be taxed, both by holding errone-
ously that such rights over did so exist and by holding that,
even if such rights over did not so exist, the principle
of uniformity of taxation operated to establish them for
federal estate tax purposes.

3. Even assuming that such rights over did so exist,
the Circuit Court of Appeals erred in failing to value
them by the formula established in the Internal Revenue
Code and the Regulations thereunder. There is a conflict
in the decisions as to the method of valuing such rights

5

over, and the method followed by the Circuit Court of »
Appeals was not the proper one.

Wherefore, the petitioners respectfully pray that a
writ of certiorari issue.

Dated, Oakland, California,
March 18, 1946.

Cares A. Brarpsey,
Attorney for Petitioners.

FirzceraLp, Asspott & BEARDSLEY,
Of Counsel.

ae NEMO RD Ee 3 Re Ee BN EN ee ae

; a

CERTIFICATE OF CoUNSEL.

I hereby certify that I am of counsel for petitioners
herein and that in my judgment the foregoing petition
is well founded and not interposed for delay.

Dated, Oakland, California,
March 18, 1946.

Cuarues A. BEARDSLEY,
Of Counsel for Petitioners.

ARAB, LATA REE LON REI VENER ATE) SERN HR Se NR PEA eS MOYER

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386416_0533%3A1. Public record. Not legal advice.