Appeal from decree of Orphans' Court of Delaware County, Sept. T., 1922, No. 114, in re estate of J. Henry Carver, deceased.
H. Durston Saylor, II, with him Howard M. Lutz and Alexander Henry Carver, for appellants.
Donald M. McCurdy, Special Assistant Attorney General, with him Francis J. Gafford, Deputy Attorney General, and Walter E. Alessandroni, Attorney General, for Commonwealth, appellee.
Bell, C. J., Musmanno, Jones, Cohen, Eagen, O'Brien and Roberts, JJ. Opinion by Mr. Justice Roberts.
This is an appeal from the decree of the Orphans' Court of Delaware County, dismissing an appeal from the action of the register of wills of that county in appraising and assessing an inheritance tax on certain remainder interests in the estate of J. Henry Carver, deceased. The issue raised concerns the appropriate time to appraise such remainder interests under the Inheritance Tax Act of June 20, 1919, P. L. 521, 72 P.S. §§ 2301-2307.*fn1
In 1906, J. Henry Carver, the decedent, placed the sum of $40,000 in trust, naming his brother Charles as trustee, and reserving an income interest for himself for life, and thereafter for his wife for life or until she remarried. Upon the occurrence of either of the latter two events, the corpus of the trust was to go to decedent's surviving children, or, in default thereof, as he might appoint by will.
In 1919, J. Henry Carver died without issue, leaving a will in which he directed the trustee, upon the termination of his wife's interest, to pay the principal of the 1906 trust to eight named beneficiaries.
Decedent's brother Charles was named executor of the estate. On the basis of the inventory filed with the register of wills, the estate was appraised and a tax assessed at the appropriate rate. However, the appraisal did not include the remainder interests under the 1906 deed of trust over which decedent had retained and exercised a power of appointment. Consequently, no inheritance tax was assessed or paid on those interests.
Decedent's wife died without having remarried in 1963. In April of that year, the trustees'*fn2 account was called for audit and the trust res awarded in accordance with the power of appointment exercised by decedent in his will, subject to the payment of any inheritance tax which might become due. The register of wills thereafter appraised the remainder interests and assessed an inheritance tax at the applicable rate. The trustees appealed the appraisement and assessment to the Orphans' Court of Delaware County and, upon an adverse determination in that court, brought the present appeal.
Appellants contend that the Act of 1919 requires the Commonwealth to include all the taxable items of a decedent's estate in a single appraisement. Although it is agreed that the Commonwealth may expressly reserve a decision on any particular item, Commonwealth v. Chamberlin Estate, 346 Pa. 472, 31 A.2d 93 (1943), in the absence of such reservation, it is contended that only fraud, accident or mistake will permit the Commonwealth to appraise at a later date an item not included in its original appraisement. Since appellants deny that there is any evidence of fraud, accident or mistake on the present record, they contend that the failure of the ...