Baily's Estate

Opinion by Mr. Justice Frazer, Testator died in 1923, leaving four children surviving him, and having made a will in which, after giving various specific legacies, he directed that “all collateral inheritance or other succession tax or taxes that may be chargeable against any of the above bequests shall be paid out of my residuary estate.” He further stated that, “having given each of my children equal amounts during my lifetime and recognizing that my son will have the benefit of an income from an active business, which should yield a larger percentage than can be expected from the portion of my estate left in trust for my daughters, it is my intention to treat them as nearly equal as possible in this final provision so that each one shall have an equal income.” This clause was followed by a gift to his son of a sum of money equal to one-fourth of his interest in a named partnership, and the residue was given in trust to pay the income to his daughter’s, and the survivors of them, for their lives under a spendthrift trust, with remainder to testator’s grandchildren. Testator subsequently added a codicil in which he provided that: “In my said will in the ninth paragraph I provide that my son, Fisher Corlies Baily, shall receive a sum of money equal to one-fourth (14) of the amount to the credit of my account in the firm of Joshua L. Baily & Company at the termination of the copartnership, *6 which would be at the end of the month next following my death. I hereby modify said bequest to the extent that there shall be charged against this bequest unto my said son, Fisher Corlies Baily, a pro rata share of any and all taxes, including inheritance taxes, that may be chargeable against my residuary estate. In all other respects I ratify and confirm my said will as heretofore written.”

The sole question before us for determination is whether the direction to charge against the son named his pro rata share of “any and all taxes” includes the federal estate tax. The court below held this tax was properly included. Fisher Corlies Baily appealed.

It is true, as argued by appellant, that the federal estate tax is not an inheritance tax or a tax on the interest to which a person succeeds on death of the owner, but on the interest which has ceased by reason of such death: Edmunds v. Slocum, 264 IT. S. 61. But to place a strict technical construction on the language used by testator would tend to defeat rather than aid the general expressed intent of testator to treat his four children “as nearly equal as possible.” Having directed in his will that “all collateral, inheritance or other succession tax or taxes” should be paid out of the residue, and having made the bequest to his son without mentioning the question of payment of such taxes, and given the residue to his daughters, testator evidently later discovered that the will might reasonably be construed to impose on the daughters all taxes “chargeable against my residuary estate,” hence added the codicil to remove doubt and charge his son’s portion with its pro rata share of “any and all taxes.” This term is sufficiently comprehensive to include the federal tax, and a careful reading of the whole will leads to the conclusion that testator so intended.

The decree of the court below is affirmed at appellant’s costs,