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MERRICK ESTATE (11/18/68)

decided: November 18, 1968.

MERRICK ESTATE


Appeal from decree of Orphans' Court of Allegheny County, No. 1034 of 1962, in re estate of Eleanor D. Merrick, deceased.

COUNSEL

Benjamin M. Parker, with him Lee A. Jackson, Crombie J. D. Garrett, Attorneys, Mitchell Rogovin, Assistant Attorney General, and Vincent A. Colianni, Assistant United States Attorney, and Gustave Diamond, United States Attorney, for United States of America, appellant.

Donald L. McCaskey, with him James G. Park, and Buchanan, Ingersoll, Rodewald, Kyle & Buerger, for appellee.

Bell, C. J., Musmanno, Jones, Cohen, Eagen, O'Brien and Roberts, JJ. Opinion by Mr. Justice Jones. Mr. Justice Musmanno did not participate in the decision of this case.

Author: Jones

[ 432 Pa. Page 452]

On June 15, 1917, Herbert DuPuy (settlor) created an inter vivos trust for the benefit of a granddaughter, Amy McHenry, who is now living and 52 years of age. Under the terms of that trust, in the event of Amy McHenry's death without issue living at the time of her death, the remaindermen were settlor's three children, including Eleanor Merrick, their heirs and assigns.

Settlor died in 1930 and his successor trustee has since 1934 filed triennial accounts in the Orphans' Court of Allegheny County.

Eleanor Merrick died February 23, 1962, and, approximately fifteen months subsequent to her death, her executors filed a federal estate tax return and paid a tax of approximately $2,160,000. Some time thereafter, the Commissioner of Internal Revenue notified the executors of the completion of the audit of the tax return and that he intended to assess a federal estate tax deficiency in the amount of approximately $2,656,000. One of the alleged errors upon which the Commissioner predicated the deficiency was the failure of the executors to include in the gross estate the amount of $1,731,904.04 which the Commissioner had determined was the value of Eleanor Merrick's interest in the inter vivos trust when she died.

The executors filed in the United States Tax Court a petition for a redetermination of the asserted tax deficiency

[ 432 Pa. Page 453]

    and, at the time of this appeal, such petition was in the process of litigation in such court.

About eight months after notification of the alleged tax deficiency, the executors petitioned the Orphans' Court of Allegheny County for a declaratory judgment to establish the value of Mrs. Merrick's interest in the inter vivos trust, which the executors alleged was none. The United States Government (Government) filed preliminary objections in the declaratory judgment proceedings averring that the declaratory judgment petition did not present an actual justiciable controversy and that another available and more appropriate remedy existed.

On October 11, 1966, the Orphans' Court entered a decree dismissing the Government's preliminary objections with leave to file an answer to the declaratory judgment petition within thirty days. On October 24, 1966, the Government filed an appeal to our Court (No. 56 March Term 1967).*fn1 On March 1, 1967, the Government discontinued its appeal. Thereafter, the Government filed an answer to ...


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