T.C. Memo. 2000-63
UNITED STATES TAX COURT
BANTAM DOMESTIC TRUST, PRUDENT MAN TRUSTEE COMPANY,
TRUSTEE, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 16687-98. Filed February 29, 2000.
Jimmy C. Chisum, for petitioner.
Richard A. Rappazzo, for respondent.
MEMORANDUM OPINION
CHIECHI, Judge: This case is before the Court on respon-
dent's motion to dismiss for lack of jurisdiction (respondent’s
motion) and petitioner’s motion to substitute party and to change
caption (petitioner’s motion). We shall grant respondent’s
motion and deny petitioner’s motion.
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Background
For purposes of respondent’s motion and petitioner’s motion,
the parties do not dispute the following factual allegations that
are part of the record. During its taxable year 1994, petitioner
was a trust engaged in business in the State of Indiana. Peti-
tioner filed a Federal income tax return for estates and trusts,
Form 1041 (return), for that taxable year, which was signed by
Jimmy C. Chisum as agent for the Prudent Man Trustee Co.
Upon commencement of the examination of the 1994 return
filed by petitioner, respondent requested petitioner to provide
respondent with complete copies of the trust documents relating
to it. Petitioner refused to provide respondent with the trust
documents or any other type of documentary evidence regarding who
was the first appointed trustee of petitioner.
The notice of deficiency issued to petitioner was sent to
the following two addresses:
Bantam Domestic Trust Bantam Domestic Trust
aka Snyder Poultry Processing aka Snyder Poultry Processing
Prudent Man Trustee Company, Prudent Man Trustee Company,
Trustee Trustee
Post Office Box 138 Post Office Box 204
Harlan, Indiana 46743-0138 Snyder, Nebraska 68664-0204
Petitioner filed a petition in this Court which was signed
on its behalf by Jimmy C. Chisum, as “Agent for Trustee Prudent
Man Trustee Company”, the purported trustee for petitioner.
Respondent’s motion contends in pertinent part:
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14. In summary, Mr. Chisum lacks the capacity to bring
the instant suit directly on behalf of the trust because he
is not the trustee. Additionally, Mr. Chisum lacks the
capacity to represent the trustee or any other person in
this proceeding because he is not an attorney and is not
otherwise admitted to practice before this Court. * * *
15. Since the petition in this case was not brought by
a party with proper capacity as required by the Tax Court
Rules of Practice and Procedure, this case should be dis-
missed for lack of jurisdiction.
Petitioner filed an objection to respondent’s motion in
which it asks the Court to deny that motion. Petitioner’s
objection to respondent’s motion asserts in pertinent part:
As there is a change in fiduciary simultaneous
with this * * * Objection and the change in fiduciary
answers the objection raised by the Respondent in the
Motion to Dismiss, this Court cannot dismiss as set
forth in Rule 60(a)(1), Rules of Practice and Proce-
dure, United States Tax Court. Any further objections
by the Respondent must be done either by an answer to
the Petition or by other motions as set forth in Rule
36, Rules of Practice and Procedure, United States Tax
Court.
The Court had the document submitted by petitioner that
purported to be a change in fiduciary filed as petitioner’s
“Motion to Substitute Party and to Change Caption”. Petitioner’s
motion alleges in pertinent part:
Notice is hereby given that John P. Wilde has been
appointed as Co-Trustee of Bantam Domestic Trust along
with Jimmy C. Chisum * * * and Prudent Man Trustee Co.
has resigned * * *. John P. Wilde will be proceeding
in his capacity as a Co-Trustee of an Expressed [sic]
Trust. * * *
Attached to petitioner’s motion are two documents, one of
which is entitled “APPOINTMENT OF SUCCESSOR TRUSTEE” and the
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second of which is entitled “MINUTE OF TRUSTEE RESIGNATION”. The
document entitled “APPOINTMENT OF SUCCESSOR TRUSTEE” states:
THE PRUDENT MAN TRUSTEE CO., does hereby appoint J
C Chisum & John Wilde, as the Successor Trustees for
BANTAM TRUST.
The appointment takes effect immediately and asks
that the Successor waive all time and notice require-
ments in the appointment and resignation.
Executed this 21st day of January, in the year of
Our Lord, 1999.
THE PRUDENT MAN TRUSTEE CO.
TRUSTEE
by: /s/
Donna Chisum, F/A for Trustee
ACCEPTANCE OF APPOINTMENT AS SUCCESSOR TRUSTEE
THE PRUDENT MAN TRUSTEE CO., does hereby accept
the appointment of Successor Trustees and the resigna-
tion of J C Chisum & John Wilde. The above resignation
and waiver of time is accepted, and with the accepting
of SUCCESSOR TRUSTEES, J C Chisum & John Wilde, assume
the duties and responsibilities as TRUSTEE for BANTAM
TRUST.
Executed this 21st day of January, in the year of
Our Lord, 1999.
J C Chisum
TRUSTEE
by: /s/
J C Chisum, Trustee
John Wilde
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by: /s/
John Wilde, Trustee
The document entitled “MINUTE OF TRUSTEE RESIGNATION”
states:
THE PRUDENT MAN TRUSTEE CO., does hereby resign
the position as Trustee for BANTAM TRUST. By special
arrangement with the Successors, J. C. CHISUM & JOHN
WILDE, all the time clauses in this act are waived.
The resignation is immediate, final and irrevocable.
This resignation takes effect immediately upon the
signing and endorsement by the Successor Trustee.
This is intended to release THE PRUDENT MAN
TRUSTEE CO., from all responsibility associated with
the Trust.
Executed this 21st day of January, in the year of
Our Lord, 1999.
THE PRUDENT MAN TRUSTEE CO.
TRUSTEE
by: /s/
Donna Chisum, F/A for Trustee
Ratified, Accepted, Acknowledged this 21st day of
January, in the year of Our Lord, 1999.
J C Chisum
by: /s/
J C Chisum, Trustee
John Wilde
by: /s/
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Respondent filed an objection to petitioner’s motion (re-
spondent’s objection). That objection asserts in pertinent part:
4. In response to respondent’s Motion to Dismiss
for Lack of Jurisdiction, petitioner provided to this
Court copies of documents alleging that Prudent Man
Trustee Co. was removed as trustee and that Jimmy C.
Chisum and John P. Wilde have been appointed successor
trustees of the petitioner trust.
5. There is absolutely no evidence from which the
Court can adduce that the documents referred to in
paragraph 4., above, create a legal assignment of
either Mr. Chisum and/or Mr. Wilde as successor trust-
ees. The documents petitioner submitted appear to be
self-serving and created solely in response to respon-
dent’s original Motion to Dismiss for Lack of Jurisdic-
tion.
6. Petitioner has provided no evidence that said
assignments are valid or authorized under the terms of
the trust indenture (assuming one exists).
7. If the initial trustee or any successor trust-
ees thereafter were, in fact, an entity called Prudent
Man Trustee Co., petitioner should be required to
produce credible evidence establishing the legal exis-
tence and validity of that entity.
8. Without the evidence described above in para-
graph 7., petitioner has failed to demonstrate that
either Mr. Chisum and/or Mr. Wilde were legally
appointed as subsequent trustees authorized to act on
behalf of the trusts [sic] and bring the instant case
before this Court. See T.C. Rule 60(c).
9. The capacity of Mr. Chisum and/or Mr. Wilde to
bring the instant suit in this Court has not been
established.
The Court held a hearing on respondent’s motion and peti-
tioner’s motion (hearing), at which Mr. Chisum appeared on behalf
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of petitioner.1 At that hearing, respondent introduced into the
record a document signed by the Secretary of State of Nebraska.2
That document stated in pertinent part:
I, Scott Moore, Secretary of State of Nebraska do
hereby certify that after a thorough search of all
records, I do not find a record of a corporation by the
name
PRUDENT MAN TRUSTEE CO.
ever having filed Articles of Incorporation or issued a
Certificate of Authority to transact business as a
foreign corporation in the state of Nebraska.
Discussion
Rule 603 provides in pertinent part:
(a) Petitioner: (1) Deficiency or Liability
Actions: A case shall be brought by and in the name of
the person against whom the Commissioner determined the
deficiency (in the case of a notice of deficiency)
* * * or by and with the full descriptive name of the
fiduciary entitled to institute a case on behalf of
such person. See Rule 23(a)(1). A case timely brought
shall not be dismissed on the ground that it is not
properly brought on behalf of a party until a reason-
able time has been allowed after objection for ratifi-
cation by such party of the bringing of the case; and
1
At the hearing, the Court informed Mr. Chisum that its
allowing him to appear at the hearing as the alleged trustee of
petitioner did not mean that the Court agreed that he in fact was
a duly appointed and authorized trustee of petitioner.
2
Presumably, respondent proffered the document in question
at the hearing on respondent’s motion and petitioner’s motion
because one of the addresses to which respondent sent the notice
issued to petitioner was in Nebraska.
3
All Rule references are to the Tax Court Rules of Practice
and Procedure.
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such ratification shall have the same effect as if the
case had been properly brought by such party. * * *
* * * * * * *
(c) Capacity: * * * The capacity of a fiduciary
or other representative to litigate in the Court shall
be determined in accordance with the law of the juris-
diction from which such person's authority is derived.
The record is unclear as to whether petitioner was organized
as a trust under the laws of Arizona or some other State, al-
though the parties do not dispute that petitioner was carrying on
business during its taxable year 1994 in the State of Arizona.
At the hearing, Mr. Chisum asserted that the administration of
the trust is governed by the laws of the State of Arizona and
that the “sole jurisdiction or exclusive jurisdiction in
determining the validity of the contract for trust and determin-
ing the validity of the trustee party, * * * [is] in Superior
Court of State of Arizona.”
Assuming arguendo, as petitioner claims, that it is a trust,
the administration of which is subject to the laws of the State
of Arizona, under Arizona law, see Rule 60(c), a trustee has the
power to commence litigation on behalf of a trust.4 See Ariz.
Rev. Stat. Ann. sec. 14-7233.C.25. (West 1995). In the instant
4
Assuming arguendo, as respondent claims upon information
and belief, that petitioner is a trust, the administration of
which is subject to the laws of the State of Indiana, under
Indiana law, see Rule 60(c), a trustee has the power to commence
litigation on behalf of a trust. See Ind. Code Ann. sec. 30-4-3-
3(a)(11) (Michie 1989).
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case, petitioner has the burden of proving that this Court has
jurisdiction, see Fehrs v. Commissioner, 65 T.C. 346, 348 (1975);
National Comm. to Secure Justice in the Rosenberg Case v. Commis-
sioner, 27 T.C. 837, 839 (1957), by establishing affirmatively
all facts giving rise to our jurisdiction, see Wheeler's
Peachtree Pharmacy, Inc. v. Commissioner, 35 T.C. 177, 180
(1960); Consolidated Cos., Inc. v. Commissioner, 15 B.T.A. 645,
651 (1929). In order to meet that burden, petitioner must
provide evidence establishing that Mr. Wilde and Mr. Chisum have
authority to act on its behalf.5 See National Comm. to Secure
Justice in the Rosenberg Case v. Commissioner, supra at 839-840;
Coca-Cola Bottling Co. v. Commissioner, 22 B.T.A. 686, 700
(1931). We reject petitioner’s position that the validity of the
purported appointment of Mr. Wilde and Mr. Chisum as trustees of
petitioner falls within the exclusive jurisdiction of the Supe-
rior Court of the State of Arizona.
5
Petitioner no longer contends that Mr. Chisum is authorized
to act on its behalf in this proceeding as the agent of Prudent
Man Trustee Co., and we conclude that it has abandoned any such
argument. Even if it had not abandoned such an argument, on the
record before us, we find that petitioner has not shown that Mr.
Chisum was properly employed by the trustee of petitioner in
accordance with the laws of either the State of Arizona, see
Ariz. Rev. Stat. Ann. sec. 14-7233.C.24. (West 1995), or the
State of Indiana, see Ind. Code Ann. sec. 30-4-3-3(a)(16) (Michie
1989). We further find that, unless Mr. Chisum is a duly ap-
pointed and authorized trustee of petitioner, Mr. Chisum is not
authorized to represent or act in this proceeding on behalf of
either petitioner or the trustee of petitioner. See Rules 60,
200.
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We are not persuaded by the document relating to petitioner
entitled “APPOINTMENT OF SUCCESSOR TRUSTEE” and “MINUTE OF
TRUSTEE RESIGNATION” that Mr. Wilde and Mr. Chisum are duly
appointed and authorized trustees of petitioner. On the record
before us, we find that petitioner has failed to establish that
Mr. Wilde and Mr. Chisum are authorized to act on its behalf.6
To reflect the foregoing,
An order denying petitioner’s
motion and an order of dismissal
for lack of jurisdiction granting
respondent’s motion will be
entered.
6
We have considered all of the contentions and arguments of
petitioner that are not discussed herein, and we find them to be
without merit and/or irrelevant.