Taxation-Federal Estate Tax-Inference of Retained Life Interest Under Section 2036(a)

In 1936 decedent established an irrevocable trust naming herself and relatives as beneficiaries. The corporate trustees were directed to pay the trust income, in the exercise of their absolute discretion, either to the settlor or to the other beneficiaries. In filing her 1936 federal gift tax return settlor attempted unsuccessfully to exclude the value of a life estate in the trust income, allegedly retained by her. At her death, the value of the trust corpus was not included in her estate tax return. The Commissioner assessed a deficiency contending that decedent-settlor had retained for her life the possession or enjoyment of, or the right to income from the trust corpus within the meaning of the forerunner of section 2036 (a) of the Internal Revenue Code of 1954. Plaintiff argued that since the trust was irrevocable and the trustees were vested with absolute discretion, settlor had retained nothing which could properly be included in her estate. In an action for refund of federal estate taxes, held, dismissed. Although a discretionary trust is ordinarily excluded from a decedent\u27s gross estate, where the settlor had in fact received all the income for her life and acted in the belief that she had a life interest in such income, an informal prearrangement to exercise discretion in favor of the settlor will be inferred. As such, the trust corpus must be included in the deceased settlor\u27s estate. Estate of Skinner v. United States, 197 F. Supp. 726 (E.D. Pa. 1961), appeal taken by taxpayer to Third Circuit, CCH FED. EST. & GIFT REP. 9007

Municipal Corporations-Liability in Tort-Prospective Judicial Abrogation of the Sovereign Immunity Concept

Plaintiff\u27s decedent was killed by a fall down the elevator shaft of a building owned and maintained by the City of Detroit. Plaintiff alleged that defendant city negligently failed to protect and enclose the shaft, in violation of its own ordinances, and that such failure was the proximate cause of her husband\u27s death. The city moved to dismiss, claiming that it was engaged in a governmental function and therefore was immune from tort liability. On appeal from an order dismissing the complaint, held, affirmed by an evenly divided court. However, a majority of the court prospectively overruled the judicial doctrine of governmental immunity from ordinary torts. Williams v. City of Detroit, 364 Mich. 231, 111 N.W.2d 1 (1961)

Federal Civil Procedure--Right to Trial by Jury--State Law Controlling in Characterization of Issues as Legal or Equitable

An action for declaratory relief was brought in a federal district court to determine the validity of a contingent fee contract and the reasonableness of attorney\u27s fees in a will contest case. Plaintiff\u27s motion for summary judgment was sustained. On appeal, the court of appeals reversed and remanded with instructions to grant defendant\u27s motion for jury trial, in accordance with Oklahoma practice, on the question whether the contingent fee contract was fair and free from fraud. The Supreme Court granted certiorari, vacated the judgment, and remanded the case for reconsideration in the light of a recent state decision. On reconsideration by the court of appeals of its order granting defendant\u27s motion for jury trial, held, reversed and remanded. Since cancellation of the contingent fee contract, the basic relief being sought, is an equitable action under present Oklahoma law, there is no right of trial by jury. Simler v. Conner, 295 F.2d 534 10th Cir. 1961)

In vitro induction and proliferation of protocorm-like bodies (PLBs) from leaf segments of Phalaenopsis bellina (Rchb.f.) Christenson

An in vitro culture procedure was established to induce protocorm-like bodies (PLBs) from leaf segments of the Phalaenopsis bellina (Rchb.f.) Christenson directly from epidermal cells without intervening callus on ½ strength modified Murashige and Skoog (MS) (in Physiol Plant 15:473–497, 1962) medium supplemented with 1-Naphthaleneacetic acid (NAA; 0, 0.1, 1 mg/l) and Thidiazuron (TDZ; 0, 0.1, 1, 3 mg/l). The best response was established at 3 mg/l TDZ which induced 78% of leaf segments to form a mean number of 14 PLBs per explant after 16 weeks of culture. No PLBs were found when leaf segments were cultured on ½ strength modified MS media supplemented with 0.1 and 1 mg/l NAA. The best induction percentage for auxin: cytokinin combination was at the combination of NAA and TDZ at 1.0 and 3.0 mg/l which gave 72% induction with 9 PLBs per explant. Semi-solid ½ strength MS and liquid Vacin and Went (VW) (in Bot Gaz 110:605–613, 1949) medium were used in order to find the highest survival and number of PLBs proliferation after 3 months in culture. Half strength MS showed an average of 9 PLBs in comparison with VW with an average of 5.3 PLBs per explants. Histological observations revealed that the regenerated PLBs were generally formed from the epidermal layers of the posterior regions of the leaf segments. Scanning electron micrograph of PLBs showed the origin of newly formed PLB from the peripheral region of leaf segments

Municipal Corporations-Liability in Tort-Prospective Judicial Abrogation of the Sovereign Immunity Concept

Plaintiff\u27s decedent was killed by a fall down the elevator shaft of a building owned and maintained by the City of Detroit. Plaintiff alleged that defendant city negligently failed to protect and enclose the shaft, in violation of its own ordinances, and that such failure was the proximate cause of her husband\u27s death. The city moved to dismiss, claiming that it was engaged in a governmental function and therefore was immune from tort liability. On appeal from an order dismissing the complaint, held, affirmed by an evenly divided court. However, a majority of the court prospectively overruled the judicial doctrine of governmental immunity from ordinary torts. Williams v. City of Detroit, 364 Mich. 231, 111 N.W.2d 1 (1961)

Taxation-Federal Estate Tax-Inference of Retained Life Interest Under Section 2036(a)

In 1936 decedent established an irrevocable trust naming herself and relatives as beneficiaries. The corporate trustees were directed to pay the trust income, in the exercise of their absolute discretion, either to the settlor or to the other beneficiaries. In filing her 1936 federal gift tax return settlor attempted unsuccessfully to exclude the value of a life estate in the trust income, allegedly retained by her. At her death, the value of the trust corpus was not included in her estate tax return. The Commissioner assessed a deficiency contending that decedent-settlor had retained for her life the possession or enjoyment of, or the right to income from the trust corpus within the meaning of the forerunner of section 2036 (a) of the Internal Revenue Code of 1954. Plaintiff argued that since the trust was irrevocable and the trustees were vested with absolute discretion, settlor had retained nothing which could properly be included in her estate. In an action for refund of federal estate taxes, held, dismissed. Although a discretionary trust is ordinarily excluded from a decedent\u27s gross estate, where the settlor had in fact received all the income for her life and acted in the belief that she had a life interest in such income, an informal prearrangement to exercise discretion in favor of the settlor will be inferred. As such, the trust corpus must be included in the deceased settlor\u27s estate. Estate of Skinner v. United States, 197 F. Supp. 726 (E.D. Pa. 1961), appeal taken by taxpayer to Third Circuit, CCH FED. EST. & GIFT REP. 9007

Federal Civil Procedure--Right to Trial by Jury--State Law Controlling in Characterization of Issues as Legal or Equitable

An action for declaratory relief was brought in a federal district court to determine the validity of a contingent fee contract and the reasonableness of attorney\u27s fees in a will contest case. Plaintiff\u27s motion for summary judgment was sustained. On appeal, the court of appeals reversed and remanded with instructions to grant defendant\u27s motion for jury trial, in accordance with Oklahoma practice, on the question whether the contingent fee contract was fair and free from fraud. The Supreme Court granted certiorari, vacated the judgment, and remanded the case for reconsideration in the light of a recent state decision. On reconsideration by the court of appeals of its order granting defendant\u27s motion for jury trial, held, reversed and remanded. Since cancellation of the contingent fee contract, the basic relief being sought, is an equitable action under present Oklahoma law, there is no right of trial by jury. Simler v. Conner, 295 F.2d 534 10th Cir. 1961)