father, that made operative Paragraph Fourth II of testatrix' will.
The government argues that we are not bound by the Orphans' Court adjudication under the doctrine set forth in Commissioner v. Bosch, supra. In Bosch, the Supreme Court held that where federal estate tax liability turns upon the character of a property interest held and transferred by the decedent under state law, federal authorities are not bound by the determination of a state trial court and need only give "proper regard" to rulings of state courts other than the highest court where an underlying issue of state law is involved. It was not denied that the state proceedings were there brought for the purpose of directly affecting federal estate tax liability which is certainly not true of the Orphans' Court audit in this case. Unlike Bosch, the will in the instant case committed the determination of rights to the discretion of the Philadelphis Orphans' Court; the appropriate focus here is not on the law of the forum state but rather on the final determination which was to be made by a specific court, the precondition designated by the testatrix to make operative one or the other of two alternative testamentary dispositions. This case is analogous not to Bosch but to Willets v. Commissioner, 50 T.C. 602 (1968), in which a New Jersey trial court awarded a taxpayer his share of trustee commissions in four successive installments. The Internal revenue Service contended that the Tax Court was bound by the Bosch doctrine to make an independent determination of when the taxpayer was entitled to receive the commissions under New Jersey law but the Tax Court refused:
We think Bosch does not go that far. [T]he principles enunciated in Bosch do not, in our view, justify a Federal court's redetermining the rights of a taxpayer where the determination of those rights has undoubtedly been committed by state law to the sound discretion of a trial court, and such discretion has been exercised and not clearly abused.
Assuming arguendo that Bosch is applicable and this court, not bound by the state trial court determination, reexamines the issue to determine what the Pennsylvania Supreme Court would have decided in 1973 or 1976, it is by no means clear it would have decided Sykes then by holding as it did in 1978. If Tafel made Sykes inevitable, the learned scriveners of the Scott will would not have taken such elaborate precautions against the uncertainty they perceived and discussed with their client. Moreover, even if the Sykes opinion had been handed down prior to the death of Helen Bonnell Scott, the Pennsylvania Supreme Court would not have applied the Sykes doctrine to this case in contravention of the testatrix' intent clearly expressed in her will. Under the decisions of the Supreme Court of Pannsylvania both before and after Sykes, and as acknowledged in Sykes itself, "a will is to be construed according to the intent of the testator." Sykes, 477 Pa. at 257, 383 A.2d at 921. Sykes, like Tafel, explicitly announced a rule of construction, i.e., a presumption, in the absence of a contrary expression of intent.
But there was no need to presume Mrs. Scott's intention; her will clearly expressed an intent not to have a presumption under the "law of Pennsylvania" decide whether or not "issue" included adopted children. Instead, her will created an inherent trigger mechanism for exercising her power of appointment, either in whole or in part: a final determination by the court having jurisdiction over her father's trusts, not some later determination by the Pennsylvania Supreme Court regarding some other will nor what the Supreme Court might have decided if presented with her will. The scriveners of the will and the testatrix were well aware of the uncertainty in Pennsylvania law at that time
and testatrix' exercise of her power of appointment was drafted in the alternative to ensure that the intent of the testatrix, expressly stated in her will, would be realized.
Unlike Sykes, where neither the language of the will nor testator's scheme of distribution established with reasonable certainty whether testator's intention was to include adopted children as "issue," Mrs. Scott's intention was very plain and would have been respected by the Pennsylvania Supreme Court in 1973, 1976, or 1978.
The relevant focus is not the law of Pennsylvania as ultimately determined by the Supreme Court but the final decision of the court with jurisdiction over the trusts established by the father of Helen Bonnell Scott. Its decision, right or wrong, that "issue" did not include adopted children, made operative Paragraph Fourth II of Helen Bonnell's Scott's will in which she exercised her power of appointment not in whole but in part. Accordingly, the plaintiffs are entitled to a refund of the taxes paid, in an amount to be stipulated by the parties or determined by this court after submissions by each party. An appropriate Order follows.
AND NOW, this 16th day of December, 1980, for the reasons set forth in the accompanying memorandum, it is ORDERED that:
1. Plaintiffs' motion for summary judgment is GRANTED.
2. Defendant's motion for summary judgment is DENIED.
3. The parties shall submit an agreed computation of the amount of refund due or, upon their failure to agree, shall submit their separate computations to the court for resolution within ten (10) days of the date of this Order.