10. During the early part of 1927 said James H. Clarke was taken ill and forced to retire temporarily from managing the Orinoka Mills.
11. In or about September, 1927, said James H. Clarke suffered a stroke and never thereafter was able to resume management and control of the Orinoka Mills. As a result thereof, plaintiff, A. Vinton Clarke, in September, 1927, took over the permanent active management of said mill.
12. In or about December, 1927, or January, 1928, Mary Jane Clarke transferred and delivered 1,353 shares of common stock and 451 shares of preferred stock of Orinoka Mills to her son, A. Vinton Clarke, in pursuance of the aforementioned long-standing family arrangement. The transfer of said 1,353 shares of common stock and 451 shares of preferred stock of Orinoka Mills by said Mary Jane Clarke to plaintiff was not made in contemplation of death but in pursuance of the aforesaid family arrangement.
13. In January of 1928, the physical condition of Mary Jane Clarke was practically no different from what it had been in preceding years, nor was it a serious condition.
14.Mary Jane Clarke died June 7, 1928, at the age of 68 years; her death resulting from various afflictions from which she had been suffering for more than ten years.
15. On March 1, 1929, plaintiff, as executor, made a return for the purpose of federal estate tax on the estate of Mary Jane Clarke to the then collector of internal revenue for the First collection district of Pennsylvania. In said return, plaintiff, as executor, alleged that the aforementioned shares of stock of Orinoka Mills were not transferred to plaintiff by decedent in contemplation of death.
16. The value of the said Orinoka Mills shares transferred to plaintiff in December, 1927, or January, 1928, constituted nearly the entire estate of the said Mary Jane Clarke. The gross estate of the said Mary Jane Clarke was determined to be $525,599.82; of this amount the value of the transferred stock was fixed at $518,650, and the value of other assets $6,949.82.
17. On March 21, 1929, plaintiff paid to the collector of internal revenue, federal estate tax in the amount of $9,161.24.
18. Subsequently a deficiency assessment was made and a further tax of $4,460.35 was paid by the plaintiff to the collector on March 31, 1930.
19. On April 6, 1932, plaintiff filed, in duplicate, with the then collector of internal revenue for the First collection district of Pennsylvania, a claim for refund of the entire tax paid as above, together with interest from the dates of payment.
20. On June 11, 1932, J. S. McLaughlin, collector of internal revenue for the First collection district of Pennsylvania, died.
21. On June 24, 1932, plaintiff was notified that his claim for refund was rejected
22. This suit by the plaintiff against the United States of America under the Tucker Act was commenced in the District Court for the Eastern District of Pennsylvania on the 12th day of August, 1932.
Conclusions of Law.
1. Under the Tucker Act (28 USCA § 41 (20), the District Court has jurisdiction of this cause, the parties, and the subjectmatter.
2. The statute of limitations runs from the date of payment of the last installment of tax; hence this action was commenced within the three-year limitation period provided by statute.
3. The transfer of stock to Mary Jane Clarke by James H. Clarke on the under-standing that said stock should be retransferred to A. Vinton Clarke when he took over the management of the Orinoka Mills vested an absolute estate for a term in said Mary Jane Clarke, with remainder to her son contingent upon the date of his assumption of the management of the Orinoka Mills.
4. Said family understanding was clearly proved by competent uncontradicted testimony and constituted a valid agreement between the parties.
5. The contemplated contingency having occurred, the estate of Mary Jane Clarke in the Orinoka Mills stock terminated and transfer of said stock by her to A. Vinton Clarke constituted a performance of the family arrangement under which she had received said stock from her husband.
6. Plaintiff's uncontradicted evidence established the family arrangement whereby plaintiff was to receive the Orinoka Mills stock from his mother when he took over the management of the Orinoka Mills, and such uncontradicted evidence rebutted any alleged statutory presumption that the transfer of the stock to plaintiff was made in contemplation of death.
7. The transfer of the 1,353 shares of common stock and 451 shares of preferred stock of the Orinoka Mills by Mary Jane Clarke to A. Vinton Clarke was proved not to be a gift in contemplation of death.
8. The United States of America, defendant herein, must repay to the plaintiff, as executor of the estate of Mary Jane Clarke, the full amount of the tax paid ($13,621.59), with interest on $9,161.24 from March 21, 1929, and on $4,460.35 from March 31, 1930.
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