Appeal, No. 146, Jan. T., 1952, from decree of Orphans' Court of Lancaster County, Dec. T., 1950, No. 39, in Estate of John W. Eshelman, Jr., Deceased. Decree affirmed; reargument refused July 24, 1952.
William M. Musser, Jr., with him Appeal, Ranck, Levy & Appeal, for appellant.
Francis J. Gafford, Deputy Attorney General, with him Harold E. Martin and Robert E. Woodside, Attorney General, for appellee.
Before Drew, C.j., Stern, Stearne, Jones, Bell, Chidsey and Musmanno, JJ.
OPINION BY MR. CHIEF JUSTICE DREW
The sole question raised on this appeal is whether the gifts of $120,000 worth of stock transferred from decedent, John W. Eshelman, Jr., to certain donees within one year of his death were taxable under the Pennsylvania Inheritance Tax Act of June 20, 1919, P.L. 521.
Section 1 (c) of the Act, as amended, imposes a tax upon the transfer of any property by a resident where that transfer is made in contemplation of death of the grantor. It further provides: "If such transfer is made within one year prior to the death of the grantor... of a material part of his estate, or in the nature of a final disposition or distribution thereof, and without an adequate valuable consideration, it shall, unless shown to the contrary, be deemed to have been made in contemplation of death within the meaning of this clause." We have previously held that the question of whether a transfer has been made in contemplation of death is one of fact for the auditing judge whose findings have the effect of a jury's verdict and, when they are supported by competent evidence or reasonable inferences therefrom, they will not be disturbed on appeal: Carson Estate, 352 Pa. 304, 42 A.2d 592; Jacobs's Trust Estate, 320 Pa. 539, 183 A. 49. The learned auditing judge, after hearing the oral testimony offered by appellant, John J. Eshelman, the son of decedent and one of the donees, did find, as a fact, that decedent had made the transfer of material part of his estate in contemplation of death. The court en banc thereupon entered an order dismissing appellant's appeal from the filing of the transfer inheritance tax appraisement and this appeal followed.
Decedent died November 30, 1950, at the age of 80 of a coronary thrombosis after he had been operated upon for the alleviation of a tumor condition. He first underwent treatment for this ailment in October, 1949, at which time it was diagnosed as cancerous. Although decedent was not informed of this fact, he was told that "he had something that required careful observation" and "... should be carefully followed." He was released from the hospital on November 7, 1949, but was
ordered to return on December 7th, for further examination.
For many years prior to his illness decedent had been co-owner with his son of a burlap and cotton bag manufacturing business which he had founded in 1919 and incorporated in 1947. Until December 5, 1949, two days before he returned to the hospital, decedent and his son were the sole owners of all the capital stock of the corporation, each possessing 1000 shares of common stock and 1500 shares of preferred stock. On December 5, 1949, decedent made the first of the two transfers which the Commonwealth has taxed, giving 300 shares of preferred stock in his corporation to each of his daughters and 60 shares to his son. He was released from the hospital on December 13th, and five weeks later, on January 20, 1950, he made the second transfer of stock ...