*121 Decision will be entered under Rule 50.
1. Petitioner held not entitled to the deduction of amounts paid by him in 1942 and 1943 as expenses for room and meals while in Washington, D. C., in the employ of the Government in several war agencies.
2. Petitioner held to be individually taxable upon the income of a certain trust over and above the amount of such income paid to his sister under the terms of the trust. Further held, that such portions of the trust income as were paid by the trustee direct to various charities under written designation by petitioner were not deductible by the trust and were limited in their deduction by petitioner to the amount allowable as charitable contributions under the statute to an individual.
*50 Respondent has determined a deficiency in income and victory tax for the year 1943 in the amount of $ 40,372.39. The taxable year 1942 is involved by reason of the provisions of the Current Tax Payment Act. The parties stipulated some of the facts, which are included herein by reference. Additional facts appearing hereinafter in our findings of fact are established by evidence received at the hearing.
The questions presented are: (a) whether expenditures of petitioner in Washington, D. C., during the years 1942 and 1943, for hotel rooms, meals and incidentals while in the service of the Government in various war agencies are deductible under the provisions of section 23 (a)(1)(A) of the Internal Revenue Code; (b) whether, for the taxable years involved, the income of a certain trust over and above $ 5,000 payable in each year to petitioner's sister is includible in petitioner's income; and (c) if petitioner is under no legal duty, imposed by the express trust or by reason of a constructive trust, to designate from income any amounts to charity, whether the amounts actually paid to charity by the trustee upon order of the petitioner are deductible in full by the *123 trust or deductible by the petitioner and, as such, subject to the limitation of the deduction for charitable gifts imposed by the statute upon such gifts by an individual.
FINDINGS OF FACT.
The petitioner is an individual and a resident of Pittsburgh, Pennsylvania. His returns for the taxable years here involved were filed with the collector of internal revenue at Pittsburgh, Pennsylvania.
For a period of seven or more years prior to 1942 petitioner was an officer, director, and stockholder of six large and active corporations which maintained offices at his office, 1900 Farmers Bank Building, Pittsburgh, Pennsylvania. For 16 years prior to 1942, the petitioner was treasurer, a director, and a stockholder of Falk & Co., a large and prosperous business, which had been organized by petitioner's father and uncle. This business was located at Carnegie, Pennsylvania, near Pittsburgh.
At all times subsequent to 1934, the petitioner has been actively engaged in philanthropic and community activities in Pittsburgh, serving at times as president of the Community Chest, president of the Federation of Jewish Philanthropies, chairman and trustee of the Falk Foundation, and trustee of the University*124 of Pittsburgh. For some years prior to 1942 and during the years here involved, petitioner owned and operated a large stock and dairy farm at Schellsburg, Pennsylvania. This farm was operated upon a commercial basis.
For many years petitioner's family had participated actively in philanthropic work in Pittsburgh. His father, Leon Falk, and the *51 brother of the latter, Maurice Falk, were for many years in business together and amassed large fortunes. They made many substantial gifts for charitable purposes. Usually their donations were made jointly.
In February 1942, petitioner accepted an appointment to the office of the Coordinator of Inter-American Affairs at Washington, D. C., to give such aid as he could in the prosecution of the war. He was later transferred to the Board of Economic Warfare, and from there to the Commodity Credit Corporation. Petitioner's first employment with the Government was without compensation, but after approximately two months he was placed on a regular salary, receiving in 1942 $ 3,899.95 and in 1943 $ 7,797.53. These sums were only a small fraction of petitioner's gross income for these years. Petitioner's employment with the Government*125 was with no thought of any permanent connection, and he secured his release from Government employment as soon as he felt that his services were no longer needed.
In the years 1942 and 1943 petitioner and his wife owned their residence at 1200 Bennington Avenue, Pittsburgh, Pennsylvania, and had owned it for many years prior thereto. Petitioner's wife and his minor children remained in this residence at Pittsburgh during the period of petitioner's service in Washington, except for summer months spent at the farm in Schellsburg. While occupied in Washington in Government service, petitioner stayed on a day-to-day basis at a hotel. He was required by this employment to spend substantially his entire time in Washington except for weekends which he spent at his residence in Pittsburgh or on the farm at Schellsburg. Prior to his coming to Washington in his Government employment, petitioner devoted a large part of his time to the several business enterprises in which he held positions as officer and director. A large part of his time was also devoted to supervising various family investments. These investments were very large, and the greater portion of the responsibility for them*126 was borne by petitioner.
When petitioner was assigned to the Board of Economic Warfare, he was required to give up all compensation for services rendered to his private businesses. During the taxable years 1942 and 1943, petitioner continued to serve on an unsalaried basis on all of these businesses except Falk & Co., which dealt in products similar to those which the petitioner was handling in his Government employment. Petitioner also continued to operate his farming business at Schellsburg during those years.
After termination of petitioner's Government service in Washington, he returned to Pittsburgh and resumed on a full time basis all of his former activities. In 1942 the petitioner spent $ 3,901.04 for meals and lodging in Washington and $ 57.91 for telephone and telegraph *52 charges. In 1943 he spent the sum of $ 5,804.83 for such meals and lodging and $ 9.07 for telephone and telegraph charges. Such amounts of his hotel bills as were incurred as a result of his wife's coming from Pittsburgh to spend weekends with him were not included in these amounts.
In 1919 petitioner's father, Leon Falk, executed two similar trusts, one in favor of his daughter and the other*127 in favor of petitioner. To each of these trusts Leon Falk conveyed approximately $ 1,000,000 in securities. The trustee of each trust was Maurice Falk, his brother. Each trust was revocable by the donor with the consent of the beneficiary.
In the fall of 1927, petitioner's sister, who was then 23 years of age, returned from a European trip and announced her intention of marrying a man she had met abroad and establishing her residence in France. To this her father objected, as he wished his daughter to participate in the community life of Pittsburgh, and the money which he had acquired there during his lifetime he wished spent in Pittsburgh and not transferred to Europe. With the consent of his daughter, he thereupon terminated the trust of which she was the beneficiary and transferred all of the assets to a new trust created on November 11, 1927. Of this new trust, Maurice Falk was designated as the trustee. The trust was to continue until the death of the survivor of the donor and the petitioner. It was terminable by the donor during his life, but became irrevocable upon his death. The donor died October 20, 1928, since which time petitioner has had neither the power to *128 revoke the trust nor to invade the corpus thereof. Article Second of the deed of trust of November 11, 1927 provides:
SECOND: The Trustee shall pay over the dividends, interest and income from the trust estate, remaining after payment thereout of the expenses of maintenance, taxes or other proper disbursements, as follows:
1. To Marjorie Falk, the daughter of the Donor, there shall be paid annually in quarterly instalments, as near as may be, such portion of said income as the Donor in his lifetime and Leon Falk, Jr., the son of the Donor, after the death of the Donor, shall from time to time in writing direct; provided, however, that after the death of the Donor the amount so paid shall not be less than Five Thousand Dollars per year. The payments so to be made to said Marjorie Falk shall be made each year until the trust is terminated.
2. To such charities and benevolences, charitable, benevolent and educational institutions as the Donor in his lifetime, and as Leon Falk, Jr., after the death of the Donor shall, from time to time in writing, designate, there shall be paid such portion of said income as the Donor in his lifetime and Leon Falk, Jr., after the Donor's death shall *129 direct, each year until the trust is terminated.
3. To Leon Falk, Jr., the son of the Donor, there shall be paid annually all of said income which shall not be paid to said Marjorie Falk and to Charitable, benevolent and educational purposes as aforesaid. The payments so to be made shall be made each year until the termination of the trust.
*53 Since in the taxable years the donor was dead, the trust was to terminate upon the death of petitioner and the corpus was to be distributed $ 100,000 to petitioner's sister, if living, or if dead, $ 50,000 to each of her surviving children, they to receive not in excess of $ 200,000, equally divided, and the balance of the corpus in accordance with the direction of petitioner by his last will and testament, such power of appointment to be unrestricted.
Maurice Falk, the trustee under the aforementioned trust, acted as such until his death on March 18, 1946, when Fidelity Trust Co. of Pittsburgh became the successor trustee and has since acted in that capacity.
Petitioner's father, Leon Falk, and the latter's brother, Maurice Falk, had at all times been in business together in Pittsburgh and shared the same office. The various businesses*130 in which they were interested and from which they derived their wealth were carried on in the general vicinity of Pittsburgh. After they retired from active participation in directing their various business enterprises, the two brothers devoted the greater part of their time to the philanthropic work in which they had for many years been interested. They were among the largest contributors to charity in Pittsburgh. Included in their many special gifts to charity were joint contributions of $ 100,000 to the building fund of the Montefiore Hospital in Pittsburgh, $ 100,000 to the building fund of the Y. M. H. A. and Y. W. H. A. in Pittsburgh, $ 100,000 to the building fund of the Cathedral of Learning at the University of Pittsburgh, and $ 500,000 to the creation of the Falk Clinic at the University of Pittsburgh. After the death of Leon Falk in 1928, his brother Maurice established the Falk Foundation, a $ 10,000,000 charitable and educational foundation.
After petitioner's graduation from college in 1924, he went into the office with his father and his uncle. He was the only male member of the family of his generation, and his father and uncle undertook to train and direct him*131 to carry on the family activities, both business and philanthropic.
Subsequent to the creation by petitioner's father of the aforementioned trust of 1927, the petitioner discussed with his father the terms of the trust. Petitioner's father explained to petitioner his purpose in creating the trust was to secure petitioner's participation in charitable activities of Pittsburgh and to carry on the reputation of the family for public benevolence. His father advised petitioner of his desire that petitioner after his death carry on the activities in connection with and assistance to certain charities in which he was interested and with which the petitioner was familiar. Petitioner assured hs father that after the latter's death he would take his place and join his uncle, Maurice Falk, as the second member of the "team" *54 in the place of his father. In these conversations with his father, petitioner was specifically instructed that the welfare of his sister was the first concern of his father. She had an independent income of approximately $ 13,000 per annum, and petitioner's father stated that, although this together with the minimum amount of $ 5,000 payable to her under the*132 trust should be sufficient for her needs, one could not anticipate what the future might develop, and additional amounts in excess of the $ 5,000 of trust income might be necessary to her comfort and maintenance.
From the death of Leon Falk on October 20, 1928 to the death of Maurice Falk on March 18, 1946, the petitioner directed the payments to the charitable, benevolent and educational institutions from the income of the trust estate, which payments were actually made by the trustee, including the payment to the University of Pittsburgh for a memorial to petitioner's mother, known as the Fanny Edel Falk Elementary School, in the total sum of $ 444,804.33. An additional $ 60,000 of the net income of the trust for this period was distributed to petitioner and his sister for payment to the University of Pittsburgh for the Falk Elementary School, and was paid by them in turn to the University of Pittsburgh for that purpose, with the result that a total of $ 504,804.33 was paid directly or indirectly from the net income of the trust during such period, to charitable and educational institutions. The net income of the trust for such period was $ 793,000.
During the year 1942, the trust*133 estate made the following payments in accordance with the written instructions of the petitioner, to charitable, benevolent and educational institutions:
| United Jewish Fund | $ 5,000 |
| United War Fund | 6,000 |
| University of Pittsburgh | 10,000 |
| American Red Cross | 1,200 |
| Pittsburgh Symphonic Society | 250 |
| American Jewish Joint Agricultural Corporation | 2,500 |
| Total | $ 24,950 |
The trust estate deducted the total of these payments from its gross income for 1942.
The net income of the trust estate for the year 1942, exclusive of capital gains and accrued but unpaid interest on United States Series F Government bonds, was $ 53,934.79. Of this amount, the sum of $ 4.000, in addition to the $ 5,000 minimum payment required by the trust instrument, was paid to petitioner's sister. The balance of the trust income over and above the payments to charity and petitioner's sister was paid to petitioner, this payment being the sum of $ 20,153.90, and was included by him in his income tax return for that year.
*55 During the year 1943 the trust estate made the following payments in accordance with the written direction of the petitioner to charitable, benevolent and educational institutions: *134
| United Jewish Fund | $ 6,000.00 |
| United War Fund | 6,000.00 |
| University of Pittsburgh | 37,068.75 |
| American Red Cross | 1,500.00 |
| American Branch International Migration Service | 500.00 |
| Pittsburgh Symphonic Society | 250.00 |
| Total | $ 51,318.75 |
The total of these payments was deducted by the trust estate from its gross income for 1943.
The net income of the trust estate for the year 1943, exclusive of capital gains and accrued but unpaid interest on United States Series F Government bonds, was $ 57,297.84. Of this income, $ 5,000 was paid to petitioner's sister, and the balance, over and above this payment together with the above-mentioned charitable payments, or $ 1,219.09, was paid to the petitioner and was included by him in his income tax return for that year.
Petitioner's father had created a memorial to his first wife, petitioner's mother, by a gift of approximately $ 100,000 to his church, the Rodef Shalom Congregation, for the construction of a swimming pool, gymnasium and library. He had annually made additional gifts to cover the expenses of maintaining the memorial. In 1929, following the death of his father, petitioner directed the trustee of the trust to pay *135 the Rodef Shalom Congregation from the net income of the trust a sum aggregating $ 5,916.81, to meet the net cost of maintenance of said memorial. Subsequent to the death of petitioner's father, this memorial was discontinued by Rodef Shalom Congregation, and the funds held by that church as an endowment for the maintenance of the memorial, amounting to approximately $ 75,000, were paid by the church to petitioner and used by him for the establishment of a new memorial for his mother, known as the Fanny Edel Falk Elementary School, organized as a part of the University of Pittsburgh. The petitioner and his sister entered into an agreement with the University of Pittsburgh in which they personally guaranteed the payment of $ 125,000 to the University for the construction of the new school, and either $ 200,000 as an endowment fund or $ 10,000 a year for the maintenance of the school. Petitioner and his sister, in making this commitment to the University of Pittsburgh, expected to obtain such funds in part from the return of the endowment for the memorial from the Rodef Shalom Congregation and the balance over a period of years from the net income of the trust here involved.
*56 *136 The petitioner, accordingly, periodically from 1931 to 1937 directed the payment to the University of Pittsburgh from the net income of the trust of amounts aggregating $ 126,800.02 for the Falk Elementary School. However, the Bureau of Internal Revenue in 1938 on its audit of the years 1935, 1936, and 1937 took the position that payments made by the trust to the University of Pittsburgh for the school were in discharge of personal liabilities of petitioner and his sister and therefore taxable to them and deductible by them as charitable contributions up to the statutory 15 per cent limitation on deductions for charitable gifts by individuals. Petitioner and his sister consented to the deficiencies resulting from such treatment of the distributions, and in 1938 and subsequent years, in conformity with this treatment, any further amounts which were to be paid to the University of Pittsburgh for the Falk Elementary School under the commitment by petitioner and his sister were paid by the trust to petitioner or to his sister, who in turn paid the amounts so received, aggregating $ 60,000, to the University of Pittsburgh.
Following the death of petitioner's uncle, Maurice Falk, his *137 executors filed in the Orphans' Court of Allegheny County, Pennsylvania, the first and final account of Maurice Falk as trustee under the deed of trust of November 11, 1927. The petitioner was one of the executors of the estate of Maurice Falk. On September 18, 1946, there was filed in this proceeding by Eugene B. Strassburger, a co-executor with petitioner under the will of Maurice Falk, a petition for the appointment by the court of a trustee ad litem to represent "* * * the interests of charitable, benevolent and educational institutions under section 2 of Article Second of the said deed of trust." On the same day an order and decree was entered by the court, appointing one Arthur N. Scully as trustee ad litem. In such order and decree it is provided that the petitioner here is "required to exercise a reasonable, fair and legal discretion in carrying out the provisions of the said Section 2 of Article Second of the said deed of trust and his exercise of such discretion is subject to supervision and review by this court." This order further adjudged that Maurice Falk as trustee "was required to exercise reasonable care to assure the proper performance by the said Leon *138 Falk, Jr., of the latter's duties under the said Section 2 of Article SECOND of said deed of trust." There is no indication that a hearing or argument was held in this proceeding or that petitioner or any one else contested the petition.
When the aforesaid petition for the appointment of a trustee ad litem was filed, the first and final account of Maurice Falk, trustee, had already been filed by the executors of the will of Maurice Falk, on July 30, 1946. The death of Maurice Falk occurred before the filing of the petition in this proceeding, and at the time of the entry *57 of the order and decree of the Orphans' Court above mentioned the present issue regarding the construction of the trust of November 11, 1927 was already in controversy between petitioner and respondent.
OPINION.
The first issue is the propriety of respondent's disallowance of deductions by petitioner in his income tax returns for the two years before us of the cost of his room and board in Washington, D. C., during his employment there in those years in several of the Government war agencies. It appears that respondent has allowed petitioner the deduction of his cost of travel between Pittsburgh and *139 Washington, and the disallowances relate only to the cost of hotel rooms and meals.
In Commissioner v. Flowers, 326 U.S. 465">326 U.S. 465, it was ruled that an expense of this character to be deductible must be incident to and required by the employment. In the present case, it can not be argued that the petitioner's expenses in Washington were required by his business carried on in Pittsburgh and Schellsburg, Pennsylvania. Nor did petitioner's employment in Washington by the Government require him to maintain his home in Pittsburgh. For the purposes of his Government employment, his place of business was Washington, D. C. The case of Ney v. United States, 77 Fed. Supp. 1005, affd., 171 Fed. (2d) 449, certiorari denied, 336 U.S. 967">336 U.S. 967, appears to have arisen upon substantially identical facts to those here involved. There the taxpayer was denied the deduction of expenses for hotel rooms and board in Washington during performance of services for the Government in one of the war agencies. He had large business interests in Arkansas and, during the term of his Government employment, *140 continued to maintain his residence in that state to which he made trips at intervals to attend to his personal business affairs. Relief was also denied under substantially similar circumstances in the case of S. M. R. O'Hara, 6 T. C. 841. See also Robert F. Green, 12 T. C. 656. Respondent is sustained in his disallowance of the deductions taken.
The second issue is upon respondent's action in including in petitioner's income all the net income of a trust designated as the "Maurice Falk, Trustee Special" in excess of $ 5,000, the minimum amount payable from such income to petitioner's sister under the trust.
The terms of the trust under which this question arises are set out in our findings of fact. Petitioner contends that under the terms of the trust, read in the light of certain directions and injunctions by the donor, petitioner's father, to the petitioner, and to which petitioner agreed, it was the donor's intention to impose upon petitioner a legal duty to cause distributions of net income by the trustee to charitable and educational institutions, and that the performance by the petitioner *58 of this duty *141 was subject to review and enforcement by a court of equity.
It is argued by petitioner that the statements of the donor to petitioner as to his intentions, desires and purposes in establishing the trust having been made to petitioner and agreed to by him at a time when the trust was subject to revocation by the donor and the denial of any benefit to petitioner, a resulting or constructive trust arose under which petitioner was required to use a proper discretion in directing the disbursement of the income of the trust in accordance with the purposes expressed by the donor.
We have examined carefully the provision of the deed of trust in the light of the surrounding circumstances as established by the record, and have accepted the testimony by petitioner as to the statements made to him by his father with respect to the trust. We do not, however, find it possible to agree with petitioner that the intention of the grantor was to impose upon petitioner a legal duty with respect to distributions to charity under section 2 of Article Second of the trust deed. The wording of that section is unambiguous. The direction of the trust instrument is to the trustee. The petitioner is nowhere*142 required to designate any particular portion of income to any particular charity. The direction is merely that the trustee shall pay income in such amounts and to such educational and charitable institutions as the petitioner may direct. The gist of petitioner's testimony is that his father, the donor, expressed to him his purpose that through the trust the petitioner maintain the family reputation in the future for public generosity that it had borne in the past.
Had it been the intention and purpose of the donor that any definite portion of the income of the trust be contributed to charity, it would have been a simple matter to so provide, and petitioner admits that the donor never expressed a desire or gave a direction to him to distribute any definite amount.
During his lifetime, the donor had made a practice of joining with his brother Maurice in charitable donations, and petitioner's testimony is that his promise to his father was that he would take his place with his uncle Maurice and constitute the "team" theretofore formed by the donor and his brother Maurice.
The trust instrument was obviously drawn with legal precision and care. The income of the trust is put under the*143 control and direction of the petitioner, without express limitation other than a minimum payment of $ 5,000 per annum from the trust income to his sister.
Considering all the surrounding circumstances and the manifest pride of the donor in the reputation of his family for giving to charity in Pittsburgh and vicinity, we think the natural conclusion to draw from the terms of the instrument and the testimony of the petitioner *59 as to statements to him by his father that it was the desire and purpose of the father to make it possible for the petitioner, his son, as an individual, to maintain the reputation of the family, and that the trust was created for the purpose of providing the funds from which the petitioner could make charitable donations in the future as the donor, his father, had made in the past. A purpose of the donor to have his son, petitioner, receive personally the public gratitude from giving to public charity is more easily to be reconciled with the provisions of the trust instrument and the statements to petitioner by the donor than a purpose to create a charitable fund which the petitioner was legally bound to distribute for charitable purposes. Under the*144 latter conception, any designations of income to charity would come primarily from the donor and would serve merely to enhance the reputation of his generation of the family instead of the reputation of the new generation.
Counsel for petitioner has cited various decisions relating to constructive and resulting trusts. We do not think these are applicable here. They involve facts where the beneficiary of the constructive trust and his interest were identified. Thus a resulting trust was held to exist in In re Washington's Estate, 220 Pa. 204">220 Pa. 204; 69 Atl. 747, where an absolute bequest under the terms of the will was made to an aunt with a definite understanding that the bequest was to be used for the support of herself and two younger sisters. In that case this understanding was established by a letter written by the aunt shortly after the receipt of the bequest, stating that the testatrix by the will had vested the title in her alone only because she was better able to conserve the property and obtain the greatest return for the benefit of the three.
We have no such condition here. Neither the trust instrument nor any direction*145 by the grantor has provided for the use of any specific amount of income for any particular charity or even for charity in general. There was no charitable interest to be enforced. Howard v. Carusi, 109 U.S. 725">109 U.S. 725; Russell v. United States Trust Co., 127 Fed. 445. In Edgar R. Stix, 4 T. C. 1140, affd., 152 Fed. (2d) 562, the primary beneficiaries of two trusts were held taxable on the entire income even though secondary beneficiaries were named, to whom the primary beneficiaries could direct payment of income by the trustee for their maintenance and support. There the court held that the primary beneficiaries could not escape taxation upon the entire income of the particular trust except upon a showing that any amounts paid to a secondary beneficiary were in fact necessary for the purposes stated.
In the present case, however, petitioner's counsel contends that there has been a construction of the trust here involved by a Pennsylvania court of competent jurisdiction, holding that the trust imposed *60 a legal duty upon petitioner to make designations*146 of income to be distributed to charities, and carrying out that duty by the petitioner was subject to the supervision of the trustee and subject to review by the court. It is argued that this proceeding was adverse in character and is binding upon us.
The circumstances in connection with this proceeding, as shown by the record, are that prior to the determination of the deficiency here involved and the filing of the petition in this case the trustee, Maurice Falk, died, and the executors of his will, the petitioner, I. A. Simon, and Eugene B. Strassburger, filed in the Orphans' Court of Allegheny County, Pennsylvania, a first and final accounting of the trustee's administration of the trust estate. There Strassburger filed a petition to the court for the appointment of a trustee ad litem to protect the interests of all educational and charitable institutions under section 2 of Article Second of the trust. Petitioner's sister acknowledged receipt of notice of that proceeding. On the same date that this petition for appointment of a trustee ad litem was filed, there was also filed an order and decree thereon, which included the statement relied upon by petitioner, and construed*147 the trust instrument as imposing a legal duty upon petitioner to make distributions for charitable purposes, and held that the court had jurisdiction to review and enforce in that respect. Although the petition for the appointment of a trustee ad litem and the order of the court are separate documents, it is clear that the decree was prepared together with the application for appointment. They are in form one document of eight pages, numbered consecutively. As prepared, the order of the court is complete except for the name of the trustee ad litem, which was inserted by pen. There is no indication in the record that there was any explanation or argument except that appearing in the formal application for the appointment. Neither the Commissioner of Internal Revenue nor the United States was made a party to the application, nor is there evidence that the court was advised that a construction of the trust instrument contrary to that set out in the decree had been made by the Government and a substantial tax liability proposed against the petitioner on the basis of such construction.
A somewhat similar situation was presented in Loggie v. Thomas, 152 Fed. (2d) 636.*148 There, subsequent to the determination of the deficiency by the Commissioner of Internal Revenue, the opposing parties secured a declaratory judgment in a formal proceeding to which the Government was not made a party either through the Commissioner of Internal Revenue or the Collector of Internal Revenue. The court there held that the proceeding under such circumstances was not adverse and was not binding in the determination of tax liability. Mississippi Valley Trust Co. et al., Executors, 28 B. T. A. 387, affd., *61 72 Fed. (2d) 197, certiorari denied, 293 U.S. 604">293 U.S. 604, involved a similar principle. There the deficiency was in estate tax. The decedent in his will stated that he provided for no specific gifts in that will for charitable purposes since his directions and wishes with respect thereto were known to his two sons and his widow who would see that his wishes were carried out. His estate was left to his wife and two sons, who thereupon joined in the probate proceedings under the will in a request to the court to order and direct the distribution of $ 1,000,000 of the estate to a particular*149 university on the ground that that was what decedent desired. This request was granted and the distribution made under order of the court, as in the nature of a bequest by the decedent to the university. It was there held that the proceeding was not adverse and no deduction could be made from the gross estate by reason of the amount paid to the university.
We conclude that the decree of the Orphans' Court entered upon the application for the appointment of a trustee ad litem, as above set out, was not an adverse proceeding and the construction of the trust recited in the order appointing the trustee is not binding upon us in the determination of the petitioner's tax liability with respect to the income of the trust.
We think that the trust instrument imposed no legal duty upon petitioner to designate charitable distributions to be made by the trustee. We further hold that amounts so designated constituted gifts to charity by the petitioner under voluntary designations by him. It necessarily follows that these distributions are subject to deduction by petitioner to the extent of the 15 per cent limitation of the statute.
In determining the deficiency it appears that respondent*150 has taken the position that the trust instrument imposes no legal duty upon petitioner to designate payments to his sister in excess of $ 5,000 per annum. We do not agree. The provisions of the trust instrument with respect to petitioner's sister are that she shall be paid not less than $ 5,000 per annum. Petitioner's testimony is that his father directed him that his purpose by this provision was to make his sister's support and welfare a first charge against the trust estate and that his first duty was to designate such sums in excess of $ 5,000 as her needs might require. This direction, which petitioner agreed to carry out, is easily reconcilable with the express provisions of the trust. In the first of the two years before us, it appears that at the direction of the petitioner the trustee paid to his sister $ 4,000 in trust income in addition to the minimum of $ 5,000 provided. We think the direction for the payment of this additional $ 4,000 was an honest exercise of the discretion and duty of petitioner under the terms of the trust. Respondent makes no contention to the contrary. *62 It seems clear and we so hold that petitioner's sister had a right to receive*151 additional income over and above the minimum of $ 5,000 provided, if her needs required this additional payment, and that her rights were subject to enforcement in a court of equity. Phipps v. Commissioner, 137 Fed. (2d) 141. This additional $ 4,000, paid to petitioner's sister, is not includible in petitioner's income. Agnes K. May, 8 T. C. 860.
Decision will be entered under Rule 50.