Hoge, John Hampton

English

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Volume 37 Issue 3 Article 17 April 1931 Taxation--Trusts--Interest of One entitled to Receive Income for Life From Trust Fund John Hampton Hoge West Virginia University College of Law Follow this and additional works at: https://researchrepository.wvu.edu/wvlr  Part of the Estates and Trusts Commons, and the Tax Law Commons Recommended Citation John H. Hoge, Taxation--Trusts--Interest of One entitled to Receive Income for Life From Trust Fund, 37 W. Va. L. Rev. (1931). Available at: https://researchrepository.wvu.edu/wvlr/vol37/iss3/17 This Recent Case Comment is brought to you for free and open access by the WVU College of Law at The Research Repository @ WVU. It has been accepted for inclusion in West Virginia Law Review by an authorized editor of The Research Repository @ WVU. For more information, please contact ian.harmon@mail.wvu.edu. WEST V7IRGINIA LAW QUARTERLYIn view of these considerations it would seem that "descend"was used in its popular sense, as "to go" or "to pass." Undersuch a construction of the deed, our statute abolishing the Rule inShelley's Case would apparently limit Columbia Woolwine's estateto an equitable life estate and give her heirs a contingent remainderin fee simple. Thus construed the case would seem to be governedby Carter v. Reserve Gas Company' yet a contrary result wasreached.The plaintiffs were trying to recover an estate which had in-creased in value from $1,400 in 1868, to near $5,000,000 in 1930,and the defendants were trying to sustain titles to 152 acres ofland which had been divided into city lots, streets and alleys, andcomprised about one-third of the real estate in the City of Elkins.The decision of the Court, sustaining the contentions of the de-fendants, saved that great catastrophe to the City of Elkins, butdenied to the Woolwine heirs an estate which, it would seem, vestedin them on the death of Columbia Woolwine. The decision per-mitted a life tenant to destroy what may have been intended as acontingent remainder. It may be better to deny the titles of theWoolwine heirs than to precipitate upon the City of Elkins theprobable result of upsetting one-third of the land titles in thatcity6-WmLIA- J. MOORE.TAXATION-TRUSTS-INTEREST OF ONE ENTITLED TO RECEIVEINCOME FOR LIFE FRom TRUST FUND.-A citizen, of Virginia con-veyed certain securities to a trustee in Maryland to pay the incometo the settlor's children for life and after their death to divide theproperty among the settlor's descendants.1 The taxing authoritiesof Virginia attempted to tax the interest of one of the children, aresident of Virginia, claiming she had an equitable life estate in thefund and taxable under the provision of the intangible propertytax statute imposing taxation on bonds, notes and all other de-8W. VA. REv. CODE (1931) e. 36, art. 1, § 14; W. VA. CODE ANN. (Barnes,1923, e. 71, § 11.'Carter v. Reserve Gas Co., 84 W. Va. 741, 100 S. E. 738 (1919).5 See Pound, Mechanical Jurisprudence (1908) 8 COL. L. REV. 605; Hard-man, Stare Decisis and the Modern Trend (1926) 32 W. VA. L. Q. 163.' Commonwealth v. Safe Deposit & Trust Co., 155 S. E. 895 (1930).2 TA X CODE OF VIRGINIA (1930) e. 7, § 69.1Hoge: Taxation--Trusts--Interest of One entitled to Receive Income forPublished by The Research Repository @ WVU, 1931RECENT CASE COMMENTSmands or claims, whether secured by deed of trust, mortgage orotherwise, or not so secured.Had the court construed the interest of the beneficiary as anequitable life estate in the trust fund and held such estate taxableunder the statute, the taxation would probably be considered un-constitutional in view of the recent decision of Safe Deposit &Trust Company v. Virginia,' in which it was held, that, when in-tangible personal property is located beyond the domicile of theequitable owner and not subject to being moved by the equitableowner, the maxim mobilia sequunter personam will not be appliedand the state in which the equitable owner lives does not havejurisdiction to tax the property. The court, however, evaded allquestions of constitutionality by holding that this beneficiary hadno interest in the property, but only a right in the income for lifeand that it was not taxable under the statute.The position of the court, that the trustee held only the in-come in trust for this beneficiary and that this beneficiary had nointerest in the securities, is a novel one. No authority was cited bythe court for such statement, and the writer has been unable tofind any. Cases are numerous holding a grant or devise of profitsfrom land is a grant of the land.' By analogy it would seem thata grant of property to one in trust to manage it and give the profitsto another for life would create some kind of estate in such otherin the property. What more is a life estate in property than theright to receive the benefits from the property for life? Doesputting legal title in another take away all interest in the propertyitself from the person entitled to the benefits? The West VirginiaSupreme Courte seemingly adopts the view that it does not, by ac-cepting Story's definition,' that a trust is "an equitable right, title,or interest in property real or personal, distinct from the legalownership thereof. In other words, the legal owner holds thedirect and absolute dominion over the property in the view of thelaw, but the income, profits or benefits thereof in his hands belongwholly or in part to others." Under this definition of a trust, theperson entitled to the benefits of the trust fund for life has anequitable interest in the fund itself for life.-JOHN HAMPTON HOGE.8280 U. S. 83, 50 S. Ct. 59 (1929).Schriver v. Cobeau, 4 Watts (Pa.) 130 (1835); In re France, 75 Pa. St.220 (1874); Johnson v. Arnold, 1 Ves. 169, 27 Eng. Reprint 962 (1748). SeeUOKE ON LITTLETON 4, b.5 Wilson v. Kennedy, 63 W. Va. 1, 50 S. E. 736 (1908).0 2 S&oRY's EQUITY JURISPRaUDENCE (13th ed. 1886) § 964.2West Virginia Law Review, Vol. 37, Iss. 3 [1931], Art. 17https://researchrepository.wvu.edu/wvlr/vol37/iss3/17

Taxation--Trusts--Interest of One entitled to Receive Income for Life From Trust Fund

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Taxation--Trusts--Interest of One entitled to Receive Income for Life From Trust Fund

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