Reporter's Statement of the Case 92 C. CIS. that effect are cited in the Arant case, supra. The uniform holding of this court has been that in such a situation suit must be brought to determine title to the office in a court having jurisdiction, prior to any action to recover the salary. Plaintiff brought such a suit, but it was dismissed. What has been said above makes it unnecessary to consider the other defenses pleaded. The petition of plaintiff must be dismissed and it is so ordered. LITTLETON, Judge; and WHALEY, Chief Justice, concur. WHITAKER, Judge, took no part in the decision of this case. IRVING J. REUTER v. THE UNITED STATES [No. 44588. Decided October 7, 1940]* Income tax; declaration of trust with grantor as trustee having broad powers of control.-Where plaintiff on February 8, 1932, made a declaration of trust in which he named himself as trustee, with members of his family, including his wife, as beneficiaries, said trust being irrevocable for a period of 5 years, and at the end of that period said trust could be terminated by the plaintiff, on notice; and where under the provisions of such declaration of trust plaintiff bestowed upon himself as trustee broad and unlimited powers to deal with the trust property upon such terms and conditions as he deemed best, it is held that the plaintiff as grantor did not divest himself of ownership of the property in question so as to be considered no longer the owner of the property for the purposes of section 22 (a) of the Revenue Act of 1934. Helvering v. Clifford, 309 U. S. 331 cited. The Reporter's statement of the case: Mr. Arthur L. Everly for the plaintiff. Mr. Raymond H. Berry was on the briefs. Mrs. Elizabeth B. Davis, with whom was Mr. Assistant Attorney General Samuel O. Clark, for the defendant. Messrs. Robert N. Anderson and Fred K. Dyar were on the briefs. Certiorari denied. 74 Reporter's Statement of the Case The court made special findings of fact as follows: 1. Irving J. Reuter, the plaintiff herein, is a resident citizen of the United States and resides in the City of Miami Beach, Florida. 2. February 8, 1932, plaintiff established a trust known and designated as "The Janirv Trust Fund" by the execution of a Declaration of Trust dated on that date, copy of which is attached to a stipulation filed in this proceeding as Exhibit 1, and made a part hereof by reference. Some of the more material provisions are referred to or set out in following findings. 3. In the declaration of trust, plaintiff designated himself as trustee with respect to certain securities which he then owned and which he, under the trust, transferred and assigned to the trustee. Included among the securities so transferred were 13,527 shares of stock of the General Motors Securities Company. The trust provided that the trustee should hold the securities in trust to collect the income therefrom and that the trustee should have broad discretionary powers with respect to the reinvestment of funds which might become available under the trust for such purpose. The trust further provided that the income derived from the corpus of the trust would be disposed of in the following manner: 1. Included among the property forming the corpus of this trust are 13,527 shares of the Common Stock of the General Motors Securities Company, the net income from said 13,527 shares of General Motors Securities Company stock to be distributed as follows: (a) Nine tenths (9/10ths) of the annual net income from said General Motors Securities Company stock shall be paid to JEANETTE M. REUTER in an amount up to but not exceeding Thirty Thousand Dollars ($30,000.00) in any calendar year during the existence or life of this trust. (b) One-tenth (1/10th) of the annual net income from said General Motors Securities Company stock shall be paid to JACOB REUTER and WILHELMINA REUTER jointly in an amount up to but not exceeding Three Thousand Dollars ($3,000.00) in any calendar year during the existence or life of this trust. (c) The excess of the annual net income from said 13,527 shares of General Motors Securities Company Reporter's Statement of the Case 92 C. Cls. stock shall become corpus or principal of this trust and shall be administered in the same way and manner and under all the terms and conditions of this trust, the same as though said excess income had originally been deposited as part of the original corpus of this trust. In the event that the said General Motors Securities Company should change its name or its place of incorporation, or should retire the above-described stock and issue in lieu thereof, or in conjunction therewith, some other kind or type of securities, whether same be common stock, preferred stock, bonds, notes, or debentures, or in the event the General Motors Securities Company should dissolve or liquidate and retire its stock by the payment of cash or the issuance of other securities, as Grantor hereof, it is my intention that whatever other property of whatever kind and nature is substituted for the 13,527 shares of General Motors Securities Company stock herein deposited, shall be held by the Trustee hereunder in the same manner as though no change in the type of that security had taken place, and if a change should be effected, the income from the property received in lieu of the 13,527 shares of General Motors Securities Company stock deposited hereunder shall be paid to the beneficiaries as hereinbefore provided. 2. The balance of the net income from this trust shall be retained by the Trustee, which income shall become corpus or principal of this trust and be administered by the Trustee in the same way and manner and under all the terms and conditions of this trust, the same as though said excess income had originally been deposited as part of the original corpus of this trust. Jeanette M. Reuter, refered to above, was the wife of plaintiff and Jacob Reuter and Wilhelmina Reuter were his parents. 4. The trust instrument further provided that: This trust shall be irrevocable for at least a period of five years from and after January 1, 1932, and terminate only in the manner following: A. The Grantor may terminate this trust at any time after the expiration of five years from January 1, 1932, provided, however, he shall evidence his election in writing, serving notice of said election to terminate said trust upon the beneficiaries herein named; provided further that the notice to terminate said trust shall be given the beneficiaries herein named at least thirty days prior to the expiration of five years dating from January 1, 1932. 74 Reporter's Statement of the Case B. If the Grantor shall not survive the minimum life of this trust (five years from January 1, 1932), then and in that event this trust shall continue for a period of ten years from and after January 1, 1932. At the expiration of said ten-year period, this trust shall termínate and the property therein shall be paid and turned over to JEANETTE M. REUTER; PROVIDED, HOWEVER, if JACOB REUTER and/or WILHELMINA REUTER are living at the time said trust thus terminates, ample provision shall be made by the Trustee hereunder or by the said JEANETTE M. REUTER to provide an annual net income of Three Thousand Dollars ($3,000.00) to be paid JACOB REUTER and/or WILHELMINA REUTER for and during the life of said JACOB REUTER and/or WILHELMINA REUTER. C. In the event of the death of said JEANETTE M. REUTER prior to the termination of this trust as herein provided, and the Grantor survives said JEANETTE M. REUTER, this trust shall continue in full force and effect and any income in the hands of the Trustee remaining undistributed, but distributable to the said JEANETEE M. REUTER, shall become corpus of said trust, and thereafter the net income of said trust shall accumulate and become corpus of said trust, except so much thereof, up to Three Thousand Dollars ($3,000.00), as shall become distributable to JACOB REUTER and WILHELMINA REUTER as hereinbefore provided. It is further provided, however, that the surplus income accruing after the death of JEANETTE M. REUTER may be distributed by said Trustee within his discretion unto JACOB REUTER, WILHELMINA REUTER and/or the Grantor hereof. The judgment and decision of the Trustee in this matter shall be conclusive, final and binding upon said trust and any income accumulated in any one year and not distributed through the exercise of the discretion vested in the Trustee shall immediately become corpus and not subject to distribution as undistributed income in the succeeding year. In other words, undistributed income shall not accumulate from year to year and be distributable in the succeeding year. 5. The trustee was authorized in his sole discretion, to invade the corpus of the trust to make payments to the beneficiaries, if at any time the net income of the trust was insufficient for their proper maintenance and support or that of any member of the family of a beneficiary. Reporter's Statement of the Case 92 C. Cls. 6. In providing for broad authority in the trustee to sell, assign, convey, encumber, or otherwise deal with the corpus of the trust, the instrument stated that it was the intention of the grantor (plaintiff) to vest discretion, authority and full power in my Trustee as to the advisability of retaining any assets deposited or at any time held hereunder even though all or any portion of said assets do not constitute legal trust investments within the Michigan law. The Trustee shall not be liable for any loss by depreciation in the value of said trust property unless such loss occurs through his bad faith or wilful neglect or default. 7. The trust instrument further provided that no part of the trust estate should be subject to transfer, assignment, sale or pledge by any beneficiary or be seized in any manner or held liable for the beneficiary's debts, contracts or obligations of any character. The trustee was authorized, in his discretion, to compromise and settle claims for or against the trust estate and to consent to the reorganization, merger or consolidation of corporations whose securities were held by him. In the event of the death of plaintiff prior to the termination of the trust, provision was made for a successor trustee who would have substantially the same powers as plaintiff except that investments made by the successor-trustee must be in income-producing securities which constitute legal trust investments under the laws of Michigan. 8. On March 15, 1935, plaintiff filed with the Collector of Internal Revenue for the District of Michigan a federal income tax return for the year 1934 showing a total tax due of $20,151.15 which was paid in installments on March 20, 1935, June 17, 1935, September 16, 1935 and December 10, 1935. On this return the plaintiff did not report any of the income received by the trustee of "The Janirv Trust Fund", above mentioned, during the year 1934. Subsequently in April, 1936, pursuant to a revenue agent's report received by plaintiff, a deficiency in 1934 income tax was paid by him in the amount of $1,258.19. That deficiency was based on the inclusion in plaintiff's taxable income of the income received by the Trust during 1934, exclusive of dividends received by the Trust on General Motors Securi |