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FIDELITY TRUST CO. v. UNITED STATES

March 24, 1943

FIDELITY TRUST CO.
v.
UNITED STATES



The opinion of the court was delivered by: GIBSON

The court, after hearing and consideration, makes the following Findings of Fact and Conclusions of Law:

Findings of Fact.

 1. During the year 1935 the plaintiff, Fidelity Trust Company, was and ever since has been a corporation organized and existing under the laws of the Commonwealth of Pennsylvania and having its principal office and place of business at Pittsburgh in the Western District of Pennsylvania.

 2. During the year 1935, plaintiff was trustee of a certain trust estate (herein referred to as the E. T. Weir Trust) created by an agreement of trust dated December 29, 1934, between plaintiff and E. T. Weir.

 3. The taxes here involved are income taxes for the year 1935, assessed against the E. T. Weir Trust. The taxes in the amount of $6,582.07, with interest thereon of $1,828.46, were paid by plaintiff, as trustee of the E. T. Weir Trust, to William Driscoll, Collector of Internal Revenue for the 23d Collection District of Pennsylvania, on November 15, 1940.Said Collector at the time this action was brought was no longer in office.

 4. During the year 1935, plaintiff was also trustee of a certain trust estate (hereinafter referred to as the D. M. Weir Trust) created by an indenture of trust dated November 1, 1926 between the Bank of Pittsburgh, National Association, and D. M. Weir.

 5. During the year 1935, the E. T. Weir Trust and the D. M. Weir Trust each owned a substantial number of shares of the capital stock of National Steel Corporation.

 6. Early in 1935 plaintiff, as trustee of the said trusts, suggested to E. T. Weir, donor of the E. T. Weir Trust, and to his son, H. Kline Weir, who was one of the beneficiaries of the E. T. Weir Trust, that the securities held by these trusts shouls be diversified.

 7. Thereafter in 1935, E. T. Weir and H. Kline Weir and complainant discussed the advisability of selling 10,000 shares of National Steel Corporation stock held by the said trusts, 5,000 shares thereof to be sold out of each trust.

 8. At the time of said discussion, both E. T. Weir and H. Kline Weir held the opinion that a sale of such stock should be made in 1935, but had formed no opinion as to any specific time in 1935 for selling such stock.

 9. In the course of the discussion mentioned in paragraph 8 above, an equal division of the proceeds of the proposed sale between the two trusts was discussed and both E. T. Weir and H. Kline Weir held the opinion that such a policy should be adopted to prevent the effect of fluctuations in the market price of this stock, which might otherwise result in a benefit to one trust at the expense of the other trust as sales of the stock were made from time to time.

 10. After such discussion, H. Kline Weir talked with each of the other beneficiaries of the E. T. Weir Trust and with each of the beneficiaries of the D. M. Weir Trust and explained to them the recommendations of E. T. Weir and himself as to the sale of 10,000 shares of said stock and the equalization of the proceeds.

 11. In the course of and as a result of the conversations between H. Kline Weir and the beneficiaries mentioned above, an oral agreement was made by the beneficiaries of each of the trusts that 10,000 shares of National Steel Corporation stock should be sold by plaintiff, 5,000 shares thereof to be sold out of each trust, and the proceeds to be divided equally between the two trusts. Plaintiff, as trustee of both trusts, agreed to such equalization agreement.

 13. Thereafter, early in July, 1935, E. T. Weir and H. Kline Weir again discussed with complainant the proposed sale of National Steel Corporation stock held by the two trusts and it was ...


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