Appeal from the District Court of the United States for the Southern District of Indiana, Indianapolis Division; Robert C. Baltzell, Judge.
Before MAJOR and KERNER, Circuit Judges, and WOODWARD, District Judge.
WOODWARD, District Judge.
The question presented by this record is whether or not a gift made by the decedent, Charles E. Coffin, to his daughter, Carolyn Coffin Bradley, within two years of the death of the decedent, was made in contemplation of death within the meaning of Section 302(c) of the Revenue Act of 1926, as amended by Section 803 of the Revenue Act of 1932, 26 U.S.C.A. Int. Rev. Code, § 811(c). The estate tax on this gift was paid under protest, a claim for refund was filed and denied and suit was instituted in the District Court by decedent's executors against the Collector of Internal Revenue to recover the amount of tax paid and interest thereon. The District Court made findings of fact and stated conclusions of law and held that the gift was not made in contemplation of death. It entered judgment in favor of the executors. The collector appealed.
Decedent died October 15, 1934, at the age of 85 years. The gift of $100,000 to his daughter Carolyn was made within a little more than four months prior to his death.
Decedent was a prominent citizen of Indianapolis, Indiana. He had been a member of the park board for more than twenty years and of the board of public works from 1917 to 1921. He was very active and was engaged in large business affairs. He had been president and general manager of the Central Trust Company for a number of years prior to 1913. In that year the trust company was consolidated with the Farmers Trust Company and decedent remained a director and chairman of the board of the new company until 1929. During all of his life and up until his death he had large private business interests and owned properties which he managed. His fortune had been built up through his own efforts.From 1911 until the time of his death he was one of the directors and the treasurer of the Star Publishing Company, a corporation engaged in the publication of a number of newspapers, including the Indianapolis Star. As such treasurer he had charge of the important expenditures and investments of the Star Publishing Company. He was active as such treasurer and performed the duties of his office until July 8, 1934, excepting during times of illness hereinafter referred to and at times of his vacations. He was the personal representative of John C. Shaffer, hereinafter referred to more particularly, who owned practically all of the common stock of the corporation. He was active in many civic organizations and for many years and up to the time of his death was president of the Board of Trustees of the Meridian Street M.E. Church.
He was intensely interested in the game of whist, had written two separate books on the game and had attended national contests in different parts of the country.
Until August, 1926, decedent was at all times in good health and in regular attendance upon his various businesses, when he suffered an acute uremic attack from which he completely recovered within three or four days. On April 6, 1927, he consulted a doctor concerning a heart ailment. The doctor prescribed rest but no medicine. He visited the doctor from time to time until October 10, 1927, when he appeared to have recovered completely. On May 15, 1929, he underwent an operation for an enlarged prostate gland. Before the operation he had consulted specialists in genito-urinal surgery who recommended the operation. The heart specialist observed him after the operation and found no cause for alarm on account of decedent's heart. The prostate operation resulted in a general improvement of decedent's health. In May, 1932, he had a gastro-intestinal attack for two days, with no heart symptoms, from which he fully recovered. He did not consult a heart specialist again until December, 1933, when he had a recurrence of his former trouble. He had a complete recovery but upon the advice of his physician he went to Florida in January, 1934, and remained there until March, 1934, when he had a recurrence of the trouble that occurred in December, but he came home apparently recovered entirely. He had no further attendance by any physician until July 8, 1934.
From June 21 to June 27, 1934, he attended the session of the American Whist Congress in Chicago and won a prize. He was in apparent good health on July 4, 1934, when he attended an annual party at his daughter's home in Culver. He returned to Indianapolis after July 4th and on July 8th was stricken with what turned out to be the beginning of his last illness, the illness commencing after an attack of indigestion. From that time on he was under the supervision of a physician, but rallied from time to time and left the house for drives and attended to his business as treasurer of the Star Publishing Company until late in August, 1934. From that time on he did not leave the house and died October 15, 1934. His physician stated that decedent was always active, that after the beginning of his last illness he was always anxious to get back to his work. The physician had difficulty in keeping him confined sufficiently. There seemed to be no signs of fear of death until the last two or three weeks of his life.
On February 26, 1918, decedent's family consisted of himself, his wife Mary H. Coffin, and his daughter Carolyn Coffin, a son Clarence Coffin, by a former wife, and a step-daughter Jean Fletcher Ingram. Prior to February 26, 1918 he had advanced more than $40,000 to his son Clarence. At no time prior to June 5, 1934, had he made any advances to his daughter Carolyn.
On February 26, 1918, the decedent, Coffin, entered into a contract with John C. Shaffer whereby Shaffer sold and transferred to decedent 500 shares of the common stock of the Star Publishing Company of Indianapolis, Indiana, for the purchase price of $100,000, which was paid by decedent. By the same contract Shaffer was given the option to repurchase the stock for the same price. Certificates of stock were issued and delivered to decedent. Decedent, on February 26, 1918, in his own handwriting, made an endorsement on the contract to the effect that the contract and stock were assigned and transferred to Mary H. Coffin, his wife, and Carolyn Coffin, his daughter. About a month after the date of the contract he exhibited the contract and its endorsement to his regular attorney. He stated to his attorney that he had had some personal advantage from the personal estate of his wife and that when Shaffer should exercise the option and re-purchase the stock, decedent intended to give the proceeds to his wife and daughter. At the same time he stated to his attorney that he had provided and advanced money to Clarence Coffin, a son by a former wife, in amounts aggregating $40,000 in an attempt to establish him in business. He instructed his attorney that if he should die without having perfected the gift to his wife and daughter he desired his attorney to see that the gift was perfected, disclosing the particular place in his safe in which the instrument was kept.
Between February 26, 1918, and June 5, 1922, decedent's daughter Carolyn had been married to Charles Harvey Bradley and was thereafter known as Carolyn Coffin Bradley.
On June 5, 1922 the first certificate of stock was exchanged and a new certificate issued. The original endorsement on the contract was scratched out and a new endorsement, in the handwriting of the decedent, was made on the contract, referring to the re-issued certificate, and stating in effect that the contract was assigned to Mary H. Coffin and Carolyn Coffin Bradley. Again decedent advised his attorney of what had been done and again stated to his ...