c. Defendant's position must be that the trust agreements were in consideration of a divorce and not merely in contemplation of a divorce. Agreements made in the circumstances here disclosed are held in most of the reported cases to be merely in contemplation of divorce, and such agreements are presumptively valid and are favored rather than disfavored by the Pennsylvania courts. See Schmoker v. Schmoker, 1948, 359 Pa. 272, 59 A.2d 55; In re Neller's Estate, 1947, 356 Pa. 628, 53 A.2d 122; Zlotziver v. Zlotziver, 1946, 355 Pa. 299, 49 A.2d 779; American National Bank v. Kirk, supra; Miller v. Miller, supra; Commonwealth ex rel. Rossi v. Rossi, 1947, 161 Pa.Super. 86, 53 A.2d 887; Forbes v. Forbes, supra; Greene v. Greene, 1942, 150 Pa.Super. 182, 27 A.2d 525; Schofield v. Schofield, 1937, 124 Pa.Super. 469, 189 A. 572; In re Pierce's Estate, 1936, 123 Pa.Super. 171, 187 A. 58.
d. Defendant's position must be not merely that the trust agreements were unenforceable, but that the ownership of the stock did not pass in accordance with their terms. It is true that the Pennsylvania courts have refused to enforce agreements which were clearly and on their face in consideration of a divorce. In re Shannon's Estate, 1927, 289 Pa. 280, 137 A. 251; Commonwealth ex rel. Miller v. Miller, 1954, 176 Pa.Super. 64, 106 A.2d 627. But we are not concerned with the question of whether the trust agreements were enforceable, i.e., of whether decedent could have been required to perform his agreements to transfer the stock to the trustee. He did perform the agreements, and the ownership of the stock was transferred in accordance with the agreements. That is decisive of the issue raised here. Nothing in the law of Pennsylvania relating to collusive and illegal agreements justifies the conclusion that decedent could have set up the alleged illegal agreement for a divorce in order to rescind the transfer of the stock to the trustee. Cf. New York & Pennsylvania Co. v. Cunard Coal Co., 1926, 286 Pa. 72, 132 A. 828; Paul v. Paul, 1920, 266 Pa. 241, 109 A. 674; In re Mathiot's Estate, 1914, 243 Pa. 375, 90 A. 139; McKee v. Verner, 1913, 239 Pa. 69, 86 A. 646, 44 L.R.A.N.S., 727; Jackson v. Thomson, 1908, 222 Pa. 232, 70 A. 1095; Restatement, Contracts, 598 and Comment c.
For the foregoing reasons, after consideration of the evidence and the contentions of the parties, the court makes the following:
Conclusions of Law
1. This court has jurisdiction of the parties and the subject matter of this action.
2. The Orphans' Court of Elk County, Pennsylvania, had jurisdiction to adjudicate and did adjudicate the rights of all parties claiming or having interests in the property received by the trustee of the trusts created by decedent.
3. The decrees of the Orphans' Court of Elk County, Pennsylvania, that the shares of stock of Stackpole Carbon Company received by the trustee of the trusts in 1936 and 1939 were the property of the remaindermen under the trusts are final determinations of that question under the law of Pennsylvania and may not be reviewed in this action.
4. Neither the said shares of stock received by the trustee in 1936 and 1939 nor the shares of stock transferred to the trustee in 1930 were property in which decedent had an interest at the time of his death under Section 811(a) of the Internal Revenue Code.
5. The transfers by the decedent to the trusts were not testamentary dispositions.
6. Said trusts were not created in contemplation of death within the meaning of Section 811(c)(1)(A) of the Internal Revenue Code.
7. The property of said trusts is not taxable as a transfer by decedent intended to take effect in possession or enjoyment at or after decedent's death under Section 811(c)(1)(C) of the Internal Revenue Code.
8. The shares of stock received by the trustee in 1936 and 1939 were not property of decedent and were never transferred by decedent within the meaning of Section 811(c) of the Internal Revenue Code.
9. The property held by the trustee of said trusts was completely and irrevocably transferred to the trustee by decedent before his death. Such transfer was not void or voidable.
10. No part of the value of the property transferred by decedent to the trusts in 1930 or of the stock of Stackpole Carbon Company received thereafter is includible in decedent's estate under the Internal Revenue Code.
11. Plaintiffs have overpaid the federal estate tax on decedent's estate in the amount by which the payment represented tax on the value of stock held by the trustee of the trusts created by decedent and are entitled to recover such amount together with interest and costs as provided by law.
Entry of judgment will be suspended pending the filing of a stipulation by the parties showing the amount due the plaintiffs.
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