9 T.C. 1192">*1192 The Commissioner has determined a deficiency of $ 26,251.98 in the estate tax of the estate of Ralph Owen Howard. The deficiency results from the addition by the Commissioner to the "Net estate for basic tax" of $ 86,730.97, composed of the following items:

The petition which has been filed contests the action of the Commissioner as to all the adjustments except (a) and (c). In his brief 9 T.C. 1192">*1193 respondent concedes that he erred in adjustment (e), which leaves in issue only adjustments (b) and (d). Adjustment (b) is explained in the deficiency notice as follows:

It has been determined that the value as of the appropriate valuation date of the entire interest held jointly by decedent and his wife, Josephine M. Howard, in the bank accounts 1947 U.S. Tax Ct. LEXIS 3">*6 at Columbus Bank and Trust Company, Columbus, Georgia, and Florida Bank and Trust Company, West Palm Beach, Florida, in the respective amounts of $ 7,851.52 and $ 959.48, and in twenty-six United States savings bonds, value $ 20,590.00, is includible in the gross estate of the decedent inasmuch as no part of the said bank accounts or the said bonds is shown to have been originally owned by the surviving joint tenant or to have been acquired by her by expenditures from funds other than those which may have been received by way of gift from the decedent.

Adjustment (d) is explained in the deficiency notice as follows:

It has been determined that decedent in his life time transferred, without adequate and full consideration in money or money's worth, to his wife, 100 shares of Coca Cola International Corporation common stock and a home at West Palm Beach, Florida, in such manner and form as to require under the provisions of Section 811 (c) of the Internal1947 U.S. Tax Ct. LEXIS 3">*7 Revenue Code, inclusion of the value thereof in his gross estate.

Petitioner by appropriate assignments of error contests the foregoing adjustments (b) and (d).

The facts were established by a stipulation of facts, oral testimony, and documentary evidence.

FINDINGS OF FACT.

The facts which were stipulated are found as stipulated and are embodied herein by reference.

Petitioner is the executrix of the estate of Ralph Owen Howard, deceased, who died testate on October 19, 1941, at the age of 76 years, a resident of Palm Beach County, Florida. The estate tax return was duly filed with the collector of internal revenue for the district of Florida on January 4, 1943.

Decedent executed a will on January 21, 1920, under the terms of which he appointed his wife, Josephine M. Howard, executrix and sole legatee. The will was probated in Palm Beach County, Florida, on November 18, 1941, and Josephine M. Howard qualified as executrix thereof.

The decedent and Josephine M. Howard, sometimes hereafter referred to as Mrs. Howard, were married in 1913. At the time of their 9 T.C. 1192">*1194 marriage the decedent was in the coal business and Mrs. Howard was employed as his secretary. Shortly thereafter1947 U.S. Tax Ct. LEXIS 3">*8 the coal business failed and in 1917 the decedent and Mrs. Howard moved to a large plantation at Seals, Alabama, in which the decedent had inherited a life estate from an aunt. He operated this farm and his wife operated the dairy and poultry part thereof. The decedent and Mrs. Howard lived on the plantation until 1922, when they moved to Columbus, Georgia, where the decedent accepted employment with a bank. About 1920 decedent received inheritances from his mother and aunt. The inheritance from his mother was approximately $ 30,000, and the decedent used part of this to build a home at Columbus, Georgia.

While living on the plantation Mrs. Howard earned some money from the sale of eggs, chickens, and turkeys, which she invested on November 30, 1922, in 6 shares of Coca-Cola Co. preferred stock at a cost of $ 537.60. These shares were exchanged on November 1, 1924, for 8 shares of Coca-Cola common stock. Thereafter she received the following stock dividends on the 8 shares of Coca-Cola Co. common stock:

As a result of these stock dividends Mrs. 1947 U.S. Tax Ct. LEXIS 3">*9 Howard owned in her own right after November 16, 1935, a total of 64 shares of Coca-Cola Co. common stock and 16 shares of Coca-Cola Co. class A common stock. Between 1930 and 1941 dividends in the amount of $ 2,496 were paid on the Coca-Cola common stock and in the amount of $ 576 on the Coca-Cola class A stock, or a total of $ 3,072.

In 1925 decedent sold the house in Columbus, Georgia, for $ 15,000 and used approximately half of the money to purchase 100 shares of stock of Coca-Cola International Corporation. The remainder was used to purchase stock in the American Telephone & Telegraph Co. The certificates for both the Coca-Cola International Corporation stock and the American Telephone & Telegraph Co. stock were issued in the decedent's name.

Decedent told his wife from time to time that he intended to put some Coca-Cola stock or property in her name, and in 1929, in order to carry out this intent he handed to her certificates for 100 shares of Coca-Cola International Corporation stock and told her that he was giving the stock to her. These certificates, as well as other certificates owned by the decedent and his wife, were always kept together in a handbag until later they1947 U.S. Tax Ct. LEXIS 3">*10 acquired a safe deposit box in the bank. The Coca-Cola International stock was registered in decedent's name until 1935, when it was transferred to Mrs. Howard and the shares were then delivered to her. On February 18, 1936, the decedent made a gift tax 9 T.C. 1192">*1195 return covering these 100 shares of Coca-Cola International Corporation stock transferred to Josephine M. Howard, the return showing the date of the gift as May 25, 1935, value at time of gift, $ 40,400, and the consideration "Love and affection." Decedent made the transfer of this stock to his wife because he wanted her to have money of her own to spend.

In 1930 the decedent and Mrs. Howard opened a joint bank account in the Columbus Bank & Trust Co., Columbus, Georgia, under the title "Mr. or Mrs. Ralph O. Howard, or either, or survivor of them." Both were authorized to make withdrawals from this account and arrangements were made whereby dividends paid on stocks owned by either of them were forwarded directly by the paying company for deposit in this account. Between 1930 and the decedent's death in 1941 a total of $ 135,113.05 was deposited in the joint bank account. Of this amount, $ 30,572.50 consisted of dividends1947 U.S. Tax Ct. LEXIS 3">*11 paid on stocks which were registered in the name of Josephine M. Howard and were her individual property and were deposited in the joint bank account. The amount of $ 30,572.50 thus deposited in the joint bank account was received by her subsequent to December 1929, as follows:

In addition to the foregoing dividends belonging to Mrs. Howard which were deposited in the joint bank account, $ 3,105 was deposited from the redemption of three $ 1,0001947 U.S. Tax Ct. LEXIS 3">*12 bonds of the American Telephone & Telegraph Co. These bonds were the separate property of Mrs. Howard when they were redeemed and the $ 3,105 which was received from their redemption and deposited in the joint bank account belonged to her as her individual property. Thus, of the $ 135,113.05 deposited in the joint bank account from the time it was opened in 1930 to the date of decedent's death, $ 33,677.50 was deposited from funds which belonged separately to Mrs. Howard and the balance was deposited from funds which belonged to decedent.

Out of the money belonging to Mrs. Howard which was deposited 9 T.C. 1192">*1196 in the joint bank account, the following property was purchased for her and belonged to her at the date of decedent's death:

1947 U.S. Tax Ct. LEXIS 3">*13 In 1939 a lot was purchased in West Palm Beach, Florida. Title to this property was taken in the name of Josephine M. Howard by deed dated December 28, 1939. Thereafter a residence was constructed on the lot at a cost of approximately $ 10,000 and was completed in 1941. The decedent attended to the business details of constructing this house and made payments to the contractor when they were due. In making these payments he used funds which were transferred from the joint bank account in the Columbus Bank & Trust Co. to the Florida Bank & Trust Co., West Palm Beach, Florida, the deposit being made in the name of "Mr. or Mrs. Ralph O. Howard, or either, or the survivor of them." The value of the house, lot, and furnishings at the date of decedent's death was $ 12,500.

Mrs. Howard never drew any checks on the joint bank account. The decedent made all withdrawals and from time to time gave Mrs. Howard such funds as she needed and requested. The household expenses were paid from the joint bank account. It was Mrs. Howard's custom to ask the decedent for money when she needed it and he gave her the amount requested in cash. Decedent had been reared in luxury and enjoyed social 1947 U.S. Tax Ct. LEXIS 3">*14 life and liked to spend money, whereas Mrs. Howard was thrifty and economical and induced him to invest money rather than spend it.

The decedent and Mrs. Howard contributed to the support of Mrs. Howard's parents. While visiting in California the decedent and Mrs. Howard lived with her parents and paid the expenses of maintaining the household. Mrs. Howard's father died in 1928 and her mother died in 1931.

The medical history of decedent shows that in 1925 he had a prostate operation, from which he fully recovered. In 1935 he had an attack of shingles, from which he fully recovered. Beginning in 1935 he was examined for a general physical checkup on an average of about four times a year. The doctor found in these examinations no serious trouble of any kind. Decedent and his wife traveled a great deal. They 9 T.C. 1192">*1197 made frequent trips to California and several times after 1930 the decedent drove his car to and from California. The last trip in which he drove his car was in 1938. In the spring of 1941, just before he went to California, he bought a new car. He took up golf about 1930 and became an enthusiastic golfer, and continued to play golf until shortly before his death. 1947 U.S. Tax Ct. LEXIS 3">*15 All his life he had been active, vigorous, and healthy and was of a cheerful disposition. He died on October 19, 1941, of an intestinal obstruction which was an acute illness which struck the decedent on the train while returning from California, and he died approximately a month later. He had not had such trouble previously.

The value of the 100 shares of Coca-Cola International Corporation stock for estate tax purposes was $ 56,000. The transfer of this stock by the decedent to his wife on November 29, 1935, was not made in contemplation of death.

The value of the house, lot, and furnishings located at West Palm Beach, Florida, on October 19, 1941, the date of decedent's death, was $ 12,500. The transfer of this property by the decedent to his wife was not made in contemplation of death.

At the date of decedent's death there was $ 7,851.52 on deposit in the joint bank account at the Columbus Bank & Trust Co., Columbus, Georgia, and $ 959.48 on deposit in the joint bank account at the Florida Bank & Trust Co., West Palm Beach, Florida. Petitioner has not proved that any part of the funds on deposit at the time of decedent's death in either of these two joint bank accounts originally1947 U.S. Tax Ct. LEXIS 3">*16 belonged to Josephine M. Howard and that such funds did not originally belong to decedent, Ralph Owen Howard.

One-half of the purchase price of the $ 26,000 face value of United States savings bonds, which, at the date of decedent's death, had an agreed value of $ 20,590 and were jointly owned by decedent and his wife, was paid from funds which belonged to Josephine M. Howard when deposited in the bank account and did not originate with decedent.

OPINION.

The pleadings present the following issues for our decision:

(1) Was the transfer to Josephine M. Howard of 100 shares of Coca-Cola International stock of a value of $ 56,000 and a West Palm Beach residence of a value of $ 12,500 made in contemplation of death?

(2) Was the entire amount of the 26 United States savings bonds, valued at $ 20,590 and the $ 7,851.52, the amount on deposit in the Columbus Bank & Trust Co., and the $ 959.48 on deposit in the Florida Bank & Trust Co., all of the foregoing property being jointly owned by decedent and Josephine M. Howard, properly includible as part of decedent's gross estate?

9 T.C. 1192">*1198 We shall first consider issue 1, whether the transfers of 100 shares of Coca-Cola International Corporation1947 U.S. Tax Ct. LEXIS 3">*17 stock and a residence at West Palm Beach, Florida, were made in contemplation of death. The Commissioner does not contend that the transfers in question were incomplete; that is to say, intended to take effect in possession or enjoyment at or after decedent's death. The applicable statute is section 811 (c) of the Internal Revenue Code, the material provisions of which are set out in the margin. ¹

1947 U.S. Tax Ct. LEXIS 3">*18 We shall discuss first the transfer of the Coca-Cola International stock. Respondent contends that the decedent made a gift of the stock to Mrs. Howard on or about November 29, 1935, and that the transfer was made in contemplation of death and the value thereof should be included in decedent's gross estate under the provisions of section 811 (c). Petitioner contends that the decedent gave the stock to her in 1929, when he was 64 years of age, that the transfer was not made in contemplation of death, and that, even if it should be decided that the transfer was made in 1935, when decedent was 70 years of age, nevertheless, the transfer was not made in contemplation of death and should not be included in the decedent's gross estate.

Our first consideration is whether the gift was made in 1929 or 1935. In Lunsford Richardson, 39 B. T. A. 927, 932, we said:

It is well settled that before there can be a completed gift the donor must surrender dominion and control of the subject matter of it. Edson v. Lucas, 40 Fed. (2d) 398; Allen-West Commission Co. v. Grumbles, 129 Fed. (2d) 287; Delight Ward Merner, 32 B. T. A. 658;1947 U.S. Tax Ct. LEXIS 3">*19 79 Fed. (2d) 985; Adolph Weil, 31 B. T. A. 899; 82 Fed. (2d) 561; certiorari denied, 299 U.S. 552">299 U.S. 552; Jackson v. Commissioner, 64 Fed. (2d) 359; Dulin v. Commissioner, 70 Fed. (2d) 828. The "delivery" must be as perfect as the nature of the property and the circumstances and surroundings of the parties will reasonably permit. City Bank Farmers Trust Co. v. Hoey, 23 Fed. Supp. 831; In re Van Alstyne, 207 N.Y. 298; 100 N.E. 802. * * *

Applying these principles to the facts pertaining to the 100 shares of Coca-Cola stock referred to above, we are of the opinion that a 9 T.C. 1192">*1199 completed gift was not made prior to November 29, 1935. It is probable that decedent intended to make a gift in 1929, but one of the essential elements to the consummation of a valid gift was missing, viz., a delivery as perfect as the nature of the property and the circumstances and surroundings of the parties reasonably permitted. The 1947 U.S. Tax Ct. LEXIS 3">*20 stock certificates remained in decedent's name until November 29, 1935, when they were transferred to his wife. Decedent did not in 1929 put the subject matter of the gift beyond recall, and until that was done no gift was consummated. Cf. Burnet v. Guggenheim, 288 U.S. 280">288 U.S. 280, 288 U.S. 280">286. Moreover, when the decedent made the gift tax return on February 18, 1936, he stated that the date of the gift was May 25, 1935, thus indicating that the decedent himself did not think he had made a completed gift in 1929. Thus, we hold that the completed gift of these 100 shares of Coca-Cola International stock was made in 1935.

We shall now consider whether the transfer of the stock to Mrs. Howard in 1935 was made in contemplation of death, as that phrase is used in the statute. The transfer in question was made approximately 6 years before the decedent's death, which makes inapplicable the presumption mentioned in section 811 (c), relative to transfers made within 2 years prior to death. Since, however, the respondent has determined that the transfer was made in contemplation of death, the burden is upon the petitioner to show that it was not so made. What was the1947 U.S. Tax Ct. LEXIS 3">*21 dominant motive of the decedent in making the transfer of the property here in question? Some of the evidentiary facts are set out in our findings. These facts, among other things, show that at the time of the gift in 1935 decedent was in good health for a man of his years. He was 70 years of age, but age alone does not furnish a decisive test as to whether a transfer is motivated by considerations associated with death. United States v. Wells, 283 U.S. 102">283 U.S. 102; Flack v. Holtegel, 93 Fed. (2d) 512. The medical history of decedent shows no serious illness or ailment prior to the making of the gift such as would cause a normal person to believe that death was imminent. The evidence convinces us that the dominant purpose of decedent in making the gift of the stock was to provide an independent income for his wife so that she could have money of her own to spend. The evidence indicates that all during the decedent's life he enjoyed spending money, and prior to his marriage he had saved little, if any, money. His wife, on the other hand, was thrifty and economical and induced him to save and invest his money, and 1947 U.S. Tax Ct. LEXIS 3">*22 in appreciation he desired to provide her with an independent income. He often expressed his appreciation to Mrs. Howard for what she had done for the household in saving money. We think the object of this gift has a direct connection with motives associated with life rather than with death. Another circumstance to be noted is that, when decedent made the gift in question 9 T.C. 1192">*1200 and the other one hereinafter discussed, he did not give substantially all of his property away, thus indicating a testamentary disposition of his property. He had a comfortable fortune left after giving the property to his wife.

The executrix filed an estate tax return on January 4, 1943, disclosing a gross estate of $ 190,889.43, and paid estate tax thereon of $ 33,731.59.

We have, therefore, after a consideration of all of the evidence, found as an ultimate fact that the gift in question was not made in contemplation of death. It follows that the respondent erred in including the value of this gift as a part of the decedent's gross estate.

Was the transfer of the residential property located at West Palm Beach, Florida, made in contemplation of death? Title to the property was acquired in Mrs. 1947 U.S. Tax Ct. LEXIS 3">*23 Howard's name on December 29, 1939, and thereafter a house was constructed on the property at a cost of approximately $ 10,000. The house was completed in 1941 and at the time of decedent's death it had a value, including furnishings, of $ 12,500. All expenses incurred in the construction of the house were paid for by the decedent with funds from the joint bank account in the Florida bank. It was not, however, jointly owned property at the time of decedent's death. It was owned entirely by Mrs. Howard, and if it is to be included in decedent's estate it must be so included because he transferred the property and the funds which went into its construction in contemplation of death. The transfer was made within two years prior to the decedent's death and the petitioner has not only the burden of overcoming the correctness of respondent's determination, but the rebuttable statutory presumption affecting gifts made by a decedent within two years prior to his death mentioned in section 811 (c).

Petitioner contends, first, that the residence was constructed by her on a lot purchased by her in 1939 and that the total cost of $ 10,000 for the land and building was paid with her funds 1947 U.S. Tax Ct. LEXIS 3">*24 in the joint bank account and, second, that, even if the residence were deemed a gift from decedent to her, it was not made in contemplation of death within the meaning of section 811 (c). Regardless of whether the property was purchased and the residence constructed with funds which Mrs. Howard had contributed to the joint bank account, we do not think the transfer of the property was made in contemplation of death, as determined by the respondent, and we have so found as an ultimate fact in our findings. It is upon that ground alone that respondent has included the value of this property in decedent's estate. The facts in the record convince us that the dominant motive connected with the transfer of this property by decedent to his wife was associated with life, and not with death. From the facts we hold that decedent's dominant purpose in procuring the lot in Florida and constructing a 9 T.C. 1192">*1201 residence upon it was to provide his wife a home which would be hers and in her own name. He was in good health when it was purchased and constructed and the surrounding facts negative the idea that it was done in contemplation of death. The respondent, therefore, erred in including1947 U.S. Tax Ct. LEXIS 3">*25 the value of this property as a part of the decedent's gross estate. 283 U.S. 102">United States v. Wells, supra;Allen v. Trust Co. of Georgia, 326 U.S. 630">326 U.S. 630; Estate of Fletcher E. Awrey, 5 T.C. 222; Estate of Charles Delaney, 1 T.C. 781; McGregor v. Commissioner, 82 Fed. (2d) 948.

Issue 2.

Issue 2 involves two items of jointly owned property, namely, United States savings bonds which had a total value of $ 20,590 at the date of decedent's death and joint bank accounts which contained total deposits of $ 8,811. The Commissioner has included these entire amounts in decedent's estate, whereas petitioner contends that only one-half of each should be included.

We shall first consider the United States savings bonds. Section 811 (e) of the Internal Revenue Code is the applicable statute. ² Our findings of fact show that the sum of $ 135,113.05 was deposited in the joint bank account of decedent and his wife from the time the account was first opened to the date of decedent's death. Of this amount, we have found that $ 33,677.501947 U.S. Tax Ct. LEXIS 3">*26 was deposited from funds which belonged separately to Mrs. Howard. We have also found from the evidence that this $ 33,677.50 was used in purchasing securities and in the construction of the home for Mrs. Howard in West Palm Beach, Florida. The items of property thus purchased have been enumerated in our findings of fact. The only part of this property which was purchased in the joint names of decedent and his wife was the wife's one-half interest in the United States savings bonds. The other property purchased with these separate funds which Mrs. Howard deposited in the joint bank account was placed in the name of Mrs. Howard, and the Commissioner has not included any of it in decedent's estate, except the residence property in Florida, and that was included, as we have already stated, under the contemplation of death provisions of the statute. We have held against respondent on that issue.

1947 U.S. Tax Ct. LEXIS 3">*27 9 T.C. 1192">*1202 The face value of the jointly owned United States savings bonds was $ 26,000 and the net amount paid for them out of the joint bank account was $ 19,500. The question is, Has petitioner established that $ 9,750 of this amount was paid out of funds originating with Mrs. Howard and deposited in the account by her? We think this question must be answered in the affirmative. The evidence establishes to our satisfaction that when these United States savings bonds were purchased from time to time it was understood and agreed by decedent and his wife that the purchase money required to buy the bonds should come one-half out of the funds of decedent in the joint bank account and one-half out of the funds which had been deposited in it by Mrs. Howard. Respondent concedes that dividends paid on the 100 shares of International Coca-Cola stock after it was transferred to Mrs. Howard in 1935 belonged to her and was her own separate property. The evidence shows these dividends amounted to $ 21,517 prior to decedent's death and were deposited in the joint bank account. However, respondent contends in his brief that when these dividends were received by Mrs. Howard and deposited 1947 U.S. Tax Ct. LEXIS 3">*28 by her in the joint bank account, then for the purpose of applying the provisions of section 811 (e) relating to "jointly owned property" it must be held that these dividends are to be treated as "originally belonging" to decedent. Respondent in his brief relies in support of this contention on Dimock v. Corwin, 306 U.S. 363">306 U.S. 363. He points out that in the Dimock case the evidence disclosed that the decedent's wife contributed to the purchase of the jointly owned property, but her contribution had previously been given to her without consideration by the decedent. "Under these circumstances," says respondent, "the Supreme Court held that the full value of the jointly owned property should be included in the decedent's estate for tax purposes." Then respondent goes on to say in his brief:

It is submitted that the bank deposits in the instant case are similar to the personal property in the Dimock case. Except for the $ 3,072.00 in dividends paid on the Coca Cola stock [meaning other Coca-Cola stock than the 100 shares International Coca-Cola stock here in question] owned by Mrs. Howard, all other deposits made in Mrs. Howard's behalf stemmed 1947 U.S. Tax Ct. LEXIS 3">*29 from property given to her by decedent or purchased for her by him from funds in the joint account. Such deposits must be treated as if they had originated with the decedent since he gratuitously supplied Mrs. Howard with the stocks which earned the funds composing the deposit. If Mrs. Howard had sold the stock and deposited the proceeds of the sale in the joint bank account, the statute, as interpreted by the Dimock case, would clearly regard the deposit as decedent's property for estate tax purposes. No reason is apparent why dividends earned on the stock should not be treated in the same manner.

We do not agree with respondent's contention that dividends received by Mrs. Howard on stock registered in her own name should be treated as property originating with Mr. Howard. After the 100 9 T.C. 1192">*1203 shares of International Coca-Cola stock were given to Mrs. Howard in 1935 by her husband and certificate for these shares was issued in her name, she became the absolute owner of the stock and the dividends which she thereafter received on this stock were her individual property, and when she deposited these dividends in the joint bank account it was her property which she deposited. 1947 U.S. Tax Ct. LEXIS 3">*30 Cf. Estate of James E. Frizzell, 9 T.C. 979. In no sense did these dividends which she deposited originate with her husband. They originated with the International Coca-Cola Corporation. We do not think anything in the case of 306 U.S. 363">Dimock v. Corwin, supra, is to the contrary. We fail to see where Dimock v. Corwin has any application to dividends which Mrs. Howard received on stock which she owned in her own right, even though this stock had been given to her by her husband. If the proceeds from the sale of this stock had been deposited in the joint bank account, that would be another matter. We have no such situation here. We decide against respondent on this point. We hold that Mrs. Howard contributed her one-half share of the purchase price of the United States savings bonds and, therefore, only one-half of their value should be included in decedent's gross estate.

As to the money on deposit in the joint bank accounts at the time of decedent's death, we hold against petitioner on this issue. Our findings show that Mrs. Howard deposited out of her own separate funds $ 33,677.50 and these funds were used1947 U.S. Tax Ct. LEXIS 3">*31 to purchase property on behalf of Mrs. Howard costing $ 33,693.94. This was $ 16.94 more of property purchased than Mrs. Howard had deposited in the joint bank account. This difference is slight and neither party makes any point of this small difference. It does show, however, that at the time of decedent's death none of the deposits in the joint bank accounts represented funds originating with Mrs. Howard. The only way we could sustain petitioner on this part of issue 2 would be to hold that the $ 9,000 dividends paid on the 100 shares of International Coca-Cola stock between 1929 and 1935, when the shares were transferred to the name of Mrs. Howard, were the individual property of Mrs. Howard. This holding we are unable to make. These dividends were received by decedent in his own name and were deposited by him in the joint bank account, and we hold they were funds contributed by him to the joint bank account and must be so treated. We hold that the entire amounts in the two joint bank accounts at the date of decedent's death should be included in his gross estate under section 811 (e) of the code.

Decision will be entered under Rule 50.