The opinion of the court was delivered by: STEWART
This is an action to recover estate taxes paid under protest. The case was tried by the Court without a jury, and upon all the evidence, we make the following
1. During the year 1911, in what is now the City of Jeannette and was then the Borough of Jeannette, Westmoreland County, Pennsylvania, Oliver A. Kihchel, the decedent, and one August Schmidt formed a partnership for the purpose of carrying on the motion picture business in a rented theater under the name of 'Eagle Theater.'
2. Each of the partners made an original investment of $ 400 and carried on the business as equal partners until 1917.
3. In 1917, August Schmidt wished to retire from the partnership business. Oliver A. Kihchel and Bessie E. Kihchel, his wife, agreed to buy August Schmidt's interest in the partnership for the sum of $ 1,500, and entered into a verbal agreement under which they would thereafter be equal partners. Five Hundred Dollars of the $ 1,500 used to purchase the Schmidt interest was paid by Bessie E. Kihchel and the remaining $ 1,000 was borrowed by Oliver A. Kihchel from the Peoples National Bank of Jeannette, Pennsylvania.
5. In the year 1925, Oliver A. Kihchel and Bessie E. Kihchel purchased the premises in which the Princess Theater business was conducted. Title was taken in the name of Oliver A. Kihchel alone for the reason that the parties had been advised by their banker that they could more readily obtain credit if the property was in the name of the husband alone.
6. Part of the purchase price was paid from an account which stood in the name of Bessie E. Kihchel and the balance, $ 25,000, was evidenced by a bond signed by Bessie E. Kihchel and Oliver A. Kihchel, and secured by a mortgage on the premises which was signed by both Oliver A. Kihchel and Bessie E. Kihchel.
7. From time to time, loans were obtained by Bessie E. Kihchel and Oliver A. Kihchel for business purposes in connection with the Princess Theater, and on each occasion, the notes were signed by both and contained a certification by Bessie E. Kihchel to the effect that she was not signing as surety, guarantor or accommodation endorser, but for the benefit of her own separate estate.
8. In the early 1930's, Bessie E. Kihchel and Oliver A. Kihchel were compelled to give up the Eagle Theater due to business reverses, and thereafter carried on the business solely under the name of 'Princess Theater'.
9. After Oliver A. Kihchel and Bessie E. Kihchel associated themselves together in business in 1917, two bank accounts were carried- one in the name of 'Eagle Theater, Oliver A. Kihchel', upon which both Bessie E. Kihchel and Oliver A. Kihchel were authorized to draw checks, and one in the name of 'Bessie E. Kihchel' upon which both parties were authorized to draw checks.
10. Each Saturday night it was the practice of Bessie E. Kihchel and Oliver A. Kihchel to pay some of the expenses of the business from either cash or the Eagle Theater account, to estimate the remaining expenses and earmark an amount to be deposited in the Eagle Theater account to cover these expenses, to give to Oliver A. Kihchel an amount of case sufficient for his personal needs and to earmark the remaining amount for deposit in the account carried in the name of Bessie E. Kihchel.
11. From the account carried in the name of Bessie E. Kihchel, all of the household expenses and such expenses as clothing and the like for both parties were paid.
12. This practice with reference to division of profits and expenses was continued after the Princess Theater was acquired. In addition, as some time subsequent to the purchase of the Princess Theater and prior to the death of Oliver A. Kihchel, a third account, 'Princess Theater Tax Account', was opened. Both parties ...