
    412 F.2d 1313
    HAWAIIAN TRUST COMPANY, LTD., EXECUTOR v. THE UNITED STATES
    [No. 167-65.
    Decided July 16, 1969]
    
      
      J. Bussell (Jades, for plaintiff. Seymour S. Mints,, attorney of record. Milton Gades, Richard L. Griffith, Smith, Wild, Beebe & Gades and Hogan & Hartson, of counsel.
    
      Knox Bemis, with, whom was Assistant Attorney Generad Johnnie M. Walters, for defendant. Philip B. Miller, of counsel.
    Before Cowen, Ghief Judge, Laramore, Dureee, Davis, Collins, Skelton, and Nichols, Judges.
   Per Curiam :

This case was referred to Trial Commissioner Mastín G. White with directions to make findings of fact and recommendation for conclusions of law under the order of reference and Buie 57(a). The commissioner has done so in an opinion and report filed on October 1,1968. Defendant took no exceptions to the commissioner’s findings of fact but opposed adoption of his recommended conclusion of law. Plaintiff toot no exception to the commissioner’s findings of fact and urged adoption of bis recommended conclusion of law. Tbe case has been submitted to the court on oral argument of counsel and the briefs of the parties.

The Government’s position, as we see it, would substantially remove dower and dower rights from the marital deduction of the estate tax. That position broadly characterizes as “terminable” any dower right in which the widow has to survive for some period in order to elect, or to receive, the dower or commuted dower. So far as we have been made aware, most jurisdictions, perhaps almost all, require some election or some procedure by the widow before she can obtain her dower rights. Under the defendant’s standard, all those interests would necessarily be “terminable” and outside the marital deduction since the widow might die before electing, making her claim, or following the prescribed procedure. Yet Congress evidently thought that dower rights would be an important component of the marital deduction. Section 2056(e) (3) of the 1954 Eevenue Code expressly defines dower “or statutory interest in lieu thereof” as a property interest passing from the decedent. See also Senate Ee-port No. 1013, Part 2, 80th Cong. 2d Sess., 1948-1 Cum. Bull. 331, 332-3, 334 (on the Eevenue Act of 1948, establishing the marital deduction). True, Congress contemplated that some forms of dower (e.g. a life estate) would be “terminable” (1948-1 Cum. Bull. 331, 336, 337), but there is no indication that Congress considered that practically all dower rights would be eliminated from the marital deduction by the “terminable” provision. It is probably for that reason that the Government told the Supreme Court in its brief in Jackson v. United States, 376 U.S. 503 (1964), that “where under state law, a widow obtains a fixed right to claim a non-terminable interest at her husband’s death, the mere procedural requirement that the widow signify her election or file her claim — which she might do immediately — does not make the interest meaningfully contingent. Her election to take the interest is therefore deemed to relate back to the date of the decedent’s death, and the marital deduction is permitted with respect to the property actually passing or vesting” (pp. 15-16). In the light of that concession, the Jackson opinion cannot 'be deemed as passing upon dower rights of the kind involved in the present case, i.e. a right to commuted dower which vests at the husband’s death but as to which the wife must make an election or present a claim. We agree, moreover, with the Government’s position before the Supreme Court, and add only that it is improbable that Congress intended to discriminate among the states on the basis of variable procedures in the making of the widow’s election or her claim. Hawaii’s method of admeasurement is simply its way of setting up and establishing the widow’s election and claim.

Since the court agrees with the commissioner’s opinion, findings and recommended conclusion of law, as hereinafter set forth, it hereby adopts the same, together with the above, as the basis for its judgment in this case. Therefore, plaintiff is entitled to recover and judgment is entered for plaintiff with the amount of recovery to be determined pursuant to Eule 47(c).

OPINION OK COMMISSIONER

White, Commissioner: The question to be decided in this case is whether the estate of James W. Glover, deceased, in connection with the estate tax paid pursuant to Section 2001 of the Internal Eevenue Code of 1954, should have been allowed the marital deduction claimed by the estate under Section 2056(a) of the 1954 Code with respect to the sum of $272,529.39 which the estate paid to the decedent’s widow as the commuted value of her dower interest in a large parcel of land.

It is my opinion that the question stated in the preceding paragraph should be answered in the affirmative, and that the plaintiff, as executor of the estate, is entitled to recover in the present action. The amount of the recovery, under an agreement which the parties made with the approval of the commissioner, is to be determined in subsequent proceedings under Eule 47 (c).

The decedent, a resident of Honolulu, Hawaii, died in Honolulu on March 1,1957, leaving a wife and two children surviving him. At the time of his death, the decedent owned property that was later appraised as having a value in excess of $2,800,000, and he also had debts were amount.

The decedent left a will, which set up a testamentary trust for the benefit of his two children but which did not make any provision for his widow. The widow, however, was entitled to dower under the law of Hawaii. Section 819-1 of the Revised Laws of Hawaii, 1955, provided in part as follows :

§ 319-1. Dower. Every woman shall be endowed of one-third part of all the lands owned by her husband at any time during marriage, in fee simple, or in freehold, unless she is lawfully barred thereof. She shall also be entitled, by way of dower, to an absolute property in the one-third part of all his remaining property owned by bim at the date of his death, after the payment of all his just debts. * * *

Among the property owned by the decedent at the time of his death was a large cattle ranch, known as the Kahuku Ranch, on the Island of Hawaii. Land owned ¡by the decedent in fee simple and included in the ranch totaled approximately 158,000 acres. The livestock on the ranch consisted of 1,481 head of cattle for sale, a breeding herd of 840 head of cattle, and 8 horses, all of which were owned by the decedent.

The Kahuku Ranch was a single operating entity, with a road system, a water system, and ranching methods which required that all the usable land of the ranch be employed as an integral economic unit. For this reason, it would have been impractical — and, indeed, would have seriously impaired the aggregate value of the ranch — if one-third of the land in the ranch (on the basis of value) had been set aside for separate operation by the widow during her lifetime, as an assignment of dower to her under Section 319-1, previously quoted. Also, any sale of the ranch for its full value would have been impossible unless the ranch were sold free and clear of the possibility that it might have to be divided in order to satisfy the widow’s claim to dower.

On April 9, 1958, the present plaintiff, as the duly appointed executor of the decedent’s estate, filed a petition in the Circuit Court, First Judicial Circuit, Territory (now State) of Hawaii, alleging that there was insufficient cash (or assets readily convertible into cash) in the estate to pay the estimated Federal estate and Hawaii taxes (which were estimated as being in excess of $600,000) and the other debts and administration expenses (which were estimated as approximating $1,000,000), and that a sale of the Kahuku Ranch was necessary for the purpose of securing funds to pay the taxes, debts, and administration expenses. The petition requested authority from the court for the sale of the ranch in order to secure funds with which to pay taxes, debts, and administration expenses.

The widow entered an appearance in the proceedings before the Circuit Court, and asked the court to authorize the sale of the Kahuku Ranch. She consented to the sale of the ranch, agreed to join in the deed of the property to the purchaser, and agreed to release her dower interest in the land, so that complete title could be vested in the purchaser. She did so, however, upon the express condition that the value of her dower interest in the land be admeasured in appropriate proceedings and paid to her, as provided by the law of Hawaii. In this connection, Section 319-17 of the Revised Laws oe Hawaii, 1955, provided as follows:

§ 319-17. Standard of values; dower, curtesy, etc. Whenever it becomes expedient or necessary to determine the value of any right of dower or curtesy or any other life estate or interest in any property, in any proceeding for partition or for the admeasurement of dower or cur-tesy, or wherein the value of any such estate is required to be provided for out of the proceeds of sale of the property subject thereto, the value thereof shall be determined by the rule, method and the standards of mortality and of value that are set forth in the standard annuity tables of mortality for ascertaining the value of policies of life insurance and annuities, using five per centum per annum ¡as the rate of interest in connection therewith.

On June 4,1958, the Circuit Court decided that the sale of the Kahuku Ranch was necessary in order to secure funds for the expenses of administration, family allowances, estate and inheritance taxes, and debts of the estate; and the court authorized the present plaintiff, as executor, to sell the property at private sale.

Thereafter, the plaintiff sold the Kahuku Ranch, including the realty and the personal property, for a total price of $1,363,630. After the sale was confirmed by the Circuit Court, the plaintiff conveyed the realty to the purchaser by deed. The widow joined in the deed, thereby remising, releasing, and quitclaiming all of her estate, right, title, and interest in the ranch, by way of dower or otherwise, to the purchaser.

Subsequently, the widow filed in the Circuit Court a complaint against the present plaintiff for admeasurement of the value of her dower interest in the Kahuku Ranch land. On June 5, 1962, the Circuit Court determined that the portion of the sales price of the Kahuku Ranch allocable to the realty in which the widow had a dower right was $949,130; and that the widow was entitled to have paid to her, out of the sales price of the realty, an amount determined to be a fair equivalent for her dower interest in the realty. The court computed the value of the widow’s dower in the proceeds of the sale by determining her life expectancy from her age on the date of the sale of the ranch. The value of her dower so computed was $272,529.39; and the court allowed the widow interest on this sum from the date of the sale of the ranch. The court’s judgment, which was entered on June 5, 1962, required the present plaintiff to pay the widow the sum of $272,529.39, together with interest in the amount of $24,972.06.

In the Federal estate tax return that was originally filed on behalf of the decedent’s estate, the plaintiff did not claim any marital deduction with respect to the widow’s dower interest in the Kahuku Ranch land. However, the plaintiff later filed with the Internal Revenue Service a claim for refund which, inter alia, asserted that the decedent’s estate should be allowed a marital deduction for the amount paid by the estate to the widow as commuted dower pursuant to the admeasurement proceedings in the Circuit Court (i.e., $272,529.39). This claim was denied by the Internal Revenue Service, and the administrative action was followed by the institution of the present litigation.

Subsection (a) of Section 2056 of the Internal Revenue Code of 1954 provides that, for the purposes of the Federal estate tax imposed by Section 2001, a “marital deduction” from the decedent’s gross taxable estate is allowed in “an amount equal to the value of any interest in property which passes or has passed from the decedent to his surviving spouse * *

However, limitations upon the scope of subsection (a) are prescribed by other subsections of Section 2056. Subsection (b), for example, excludes any “terminable” interest in property passing from the decedent to his surviving spouse, by stating that “Where, on the lapse of time, on the occurrence of an event or contingency, or on the failure of an event or contingency to occur, an interest passing to the surviving spouse will terminate or fail, no deduction shall be allowed under this section with respect to such interest * *

The defendant apparently concedes in the present case that the widow’s dower interest with which the court is concerned was an “interest in property which passes or has passed from the decedent to his surviving spouse” (with respect to this point, see Section 2056(e)(3) of the 1954 Code). On the other hand, the defendant contends that the widow’s dower interest was a “terminable” interest and, therefore, did not provide a proper basis for a marital deduction.

In cases involving factual situations similar in all substantial respects to the one involved in this case, various Courts of Appeals have held that an amount paid to a widow by the estate of her deceased husband as the commuted value of her dower interest in realty qualifies for a marital deduction in connection with the payment of the estate tax. The First National Exchange Bands of Roanoke v. United States, 335 F. 2d 91 (4th Cir. 1964); United States v. Crosby, 257 F. 2d 515 (5th Cir. 1958); United States v. Hiles, 318 F. 2d 56 (5th Cir. 1963); Dougherty v. United States, 292 F. 2d 331 (6th Cir. 1961); United States v. Traders National Bank of Kansas City, 248 F. 2d 667 (8th Cir. 1957). No contrary court decision has been cited.

The defendant argues, however, that if a widow entitled to dower should die before the assignment to her of dower in kind or before the admeasurement of the financial equivalent of her dower interest, her estate after her death would not entitled to anything from the estate of her deceased huáband; and, therefore, that the possibility of the widow’s death prior to the 'assignment or admeasurement of dower represents “the occurrence of an event or contingency” that would cause the dower interest to “terminate or fail.” In this connection, the defendant cites the case of Jackson v. United States, 376 U.S. 503 (1964).

In the Jackson case, a state court in California, acting under the California Probate Code, had allowed the widow of a California decedent, pending the settlement of the husband’s estate, the sum of $3,000 per month from the corpus of the estate for her support and maintenance, beginning as of the date of the husband’s death and continuing for a period of 24 months from that date. A total of $72,000 was paid as the widow’s allowance. On the Federal estate tax return, the $72,000 was claimed as a marital deduction, but the deduction was disallowed by the Internal Revenue Service, as was a claim for refund that was filed after the payment of a deficiency. The controversy ultimately reached the Supreme Court.

The Supreme Court held that the allowance made for the support of the widow during the settlement of her husband’s estate was a “terminable” interest and, therefore, did not qualify for a marital deduction. In this connection, the Court said (376 U.S. at pp. 506-507) that in California a right to a widow’s allowance is not a vested right and nothing accrues before the issuance of a court order granting it; that if a widow dies or remarries prior to securing an order for a widow’s allowance, the right does not survive the death or remarriage; and, therefore, that as of the date of the husband’s death, the allowance is subject to failure or termination “upon the occurrence of an event or contingency.”

Basic to the Supreme Court’s decision in the Jackson case was the view that the right to a widow’s allowance during the settlement of her husband’s estate was not a right that vested as of the time of the husband’s death. By contrast, a widow’s right to dower is one that does vest at the time of the husband’s death. The First National Exchange Bank of Roanoke v. United States, supra, 335 F. 2d at page 94.

The right to dower was developed under the common law (2 H.T. Tiffany, The Law of Real Property, § 487, page 339 (3rd ed. 1939)) [this treatise will be cited subsequently as “Tiffany”], and it is recognized by the American jurisdictions which follow the rules of the common law with respect to marital interests in real property. Until the death of the husband in such a jurisdiction, the wife has merely a contingent right or interest, known as “dower inchoate,” in realty owned by the husband. 2 Tiffany, § 533, page 418. However, upon the husband’s death, the dower right of the wife loses its contingent character and becomes “consummate.” 2 Tiffany, § 534, page 424. It becomes effective at the moment of the husband’s death, and is then a vested right. The First National Exchange Bank of Roanoke v. United. States, supra, 335 F. 2d at page 93. It is not a property right at that time, but only a chose in action. United States v. Hiles, supra, 318 F. 2d at page 60; 2 Tiffany, § 534, page 428. Dower does not become an interest in property until there has been an “assignment” of dower in kind to the widow. United States v. Crosby, supra, 257 F. 2d at page 519; United States v. Hiles, supra, 318 F. 2d at page 60; The First National Exchange Bank of Roanoke v. United States, supra, 335 F. 2d at page 93; 2 Tiffany, § 533, page 418, § 534, pages 424-425.

In the present case, there was no assignment of dower in kind to the widow. What she received was the right of dower, a vested right which passed to her and became effective at the moment of her husband’s death and for which she was subsequently awarded by the Circuit Court — and was paid by the decedent’s estate — the sum of $272,529.39 as the commuted value of her dower interest in the Kahuku Ranch land. It was the right of dower for which money was awarded and paid to her in lieu of the right. This money belonged to the widow outright, her interest in it being absolute and non-terminable; and this equivalent of dower related back to the time of the husband’s death and is to be regarded as an interest passing from him to the widow (United States v. Crosby, supra, 257 F. 2d at page 519).

Allowing a marital deduction for commuted dower in this type of case is consistent with the purpose of the statutory provision authorizing the marital deduction, i.e., to equalize the incidence of the estate tax in community property and common law jurisdictions. United States v. Crosby, supra, 257 F. 2d at page 518; Dougherty v. United States, supra, 292 F. 2d at page 337; The First National Exchange Bank of Roanoke v. United States, supra, 335 F. 2d at page 94. In a jurisdiction where the community property system has been adopted, a surviving spouse is the outright owner of half of the community property, and this half is not included in the estate of the deceased spouse for estate tax purposes. Therefore, the Internal Eevenue Code permits a surviving spouse in a common law jurisdiction to acquire, free of the estate tax, up to one-half of the adjusted gross estate of the deceased spouse.

The Supreme Court has said that the intent of Congress to afford a liberal “estate-splitting” possibility to married couples, where the deductible portion of a decedent’s estate would ultimately, if not consumed, be taxable in the estate of the survivor, is unmistakable; and that the marital deduction provision of the Internal Eevenue Code should not be construed so as to impose unwarranted restrictions upon the availability of the deduction. Northeastern Pennsylvania National Bank & Trust Co., Executor v. United States, 387 U.S. 213, 221 (1967). Other courts have said, using positive phraseology, that the marital deduction provision should be liberally construed and applied in order to carry out and give effect to its purpose. United States v. Crosby, supra, 257 F. 2d at page 518; Dougherty v. United States, supra, 292 F. 2d at page 337.

It seems to be the purpose of the “terminable interest” limitation on the marital deduction to make sure that the marital deduction covers only those interests passing from the deceased spouse to the surviving spouse which, if not consumed by the survivor, will constitute part of the survivor’s estate at the time of death, will then be subject to taxation as such, and will not escape the estate tax a second time. Dougherty v. United States, supra, 292 F. 2d at page 337. In the present case, the widow received from her husband’s estate in the admeasurement proceedings the sum of $272,-529.39 as the commuted value of her dower interest in the Kahuku Eanch land. This money belongs to the widow absolutely, and, if not consumed during her lifetime, it will be part of her estate at the time of her death. Hence, the rationale for the “terminable interest” limitation on the marital deduction is not applicable to the money which the widow received in this case.

For the reasons previously stated, it is my opinion that the estate of James W. Glover, deceased, should have been allowed the marital deduction claimed by the estate under Section 2056(a) of the Internal Kevenue Code of 1954 with respect to the sum of $272,529.39 which the estate paid to the decedent’s widow as the commuted value of her dower interest in the Kahuku Ranch land. Accordingly, the plaintiff, as the executor of the estate, is entitled to recover in the present action.

Findings of Fact

1. James W. Glover (hereinafter sometimes referred to as “the decedent”), a citizen of the United States and a resident of Honolulu, Hawaii, died testate in Honolulu on March 1, 1957. The decedent was survived by Barbara Cox Glover (now Barbara Cox Glover Anthony), his widow (sometimes hereinafter referred to as “the widow”), and by Reed S. Glover, his son, and Eve Glover, his daughter.

2. (a) The plaintiff was named as executor of the last will and testament of the decedent.

(b) The decedent’s will and the first codicil to it were dated April 5,1951 and November 5, 1951, respectively. The will made no provision for the decedent’s widow. It directed that the decedent’s ranch on the Island of Hawaii be carried on as a going business, the decedent expressing the hope that his son would be employed in the ranch operation. The will also stated that the ranch required development and improvement to become a profitable operation. It set up a testamentary trust for the benefit of the two children, to be distributed to the children one-half when the oldest child attained 30 years of age and one-half when the oldest child attained 40 years of age.

3. On April 9, 1957, the plaintiff was appointed by the Circuit Court of the First Judicial Circuit, Territory (now State) of Hawaii, as executor under the will and for the estate of James W. Glover, deceased. (The probate proceeding concerning Mr. Glover’s estate was Probate No. 19712 in the Circuit Court.) The will of the decedent was admitted to probate by order of the Circuit Court on April 4,1957, and letters testamentary were issued to the plaintiff by order of the court.

4. The decedent, at the time of his death, was the owner (except as to certain parcels of land referred to hereinafter) of the Kahuku Kanch on the Island of Hawaii, in the Territory (now State) of Hawaii. The inventory filed by the plaintiff in the Circuit Court on August 14, 1957 included the ranch, as well as other real estate owned by the decedent at his death.

5. The Kahuku Kanch is located in the southern portion of the Island of Hawaii, within the Kau district. The ranch consisted of approximately 159,503 acres of land, all of which, with the exception of approximately 1,003 acres of land owned by Keed S. Glover and Eve Glover, adult children of the decedent, and 48 acres of land leased by the decedent under a lease expiring in 1963, was owned in fee simple by the decedent. All of the land (other than waste land and land covered with lava) constituting the ranch was used in the cattle ranching business conducted by the decedent as an operating entity up to his death. At the time of his death, the decedent was engaged in a program of development and improvement of the ranch.

6. Livestock on the ranch consisted of 1,481 head of cattle for sale, a breeding herd of 840 head of cattle, and 8 horses, all of which were owned by the decedent.

7. At all times relevant to this case, the Kahuku Kanch was a single operating entity, with a road system, a water system, and ranching methods which required that all the usable land of the ranch be employed as an integral economic unit. For this reason, it would have been impractical — and, indeed, would have seriously impaired the aggregate value of the ranch — to have set aside, for separate operation by the widow during her life, land of a value of one-third of the total value of the land of the ranch. For the same reason, any sale of the ranch for its full value would have been impossible unless the ranch were sold free and clear of the possibility that it might have to be divided to satisfy the widow’s claim to dower.

8. Appraisers duly appointed by the Circuit Court valued the ranch, including the land, buildings, equipment, and livestock, as of the date of death at $542,438. Their appraisal was dated October 31,1957, and was filed in the Circuit Court in Probate No. 19712 on November 7,1957.

9. On April 9, 1958, the present plaintiff filed in the Circuit Court in Probate No. 19712 its “Petition for License to Sell Eeal Estate, Order for Service by Registered Mail, Order Appointing Guardian ad Litem, and Summons.” The petition alleged that the total assets of the estate had been appraised and were valued in excess of $2,800,000; that administration expenses (other than Federal estate and Hawaii estate taxes) and debts of the decedent approximated $1,000,-000; that the estimated Federal estate and Hawaii estate taxes were estimated as being in excess of $600,000; that there was insufficient cash, or assets readily convertible into cash, in the estate to pay the administration expenses, debts, and taxes; and that a sale of the ranch forming a part of the assets of the estate was deemed advisable and necessary for the purpose of securing funds to pay the taxes, with the balance (if any) to be applied to the payment of debts and administration expenses. The petition asked the court to determine whether the ranch could be sold for the purpose of securing funds to pay taxes, debts, and administration expenses; and, if so, to issue a license to sell the ranch at private sale.

10. On May 15,1958, the widow filed in the Circuit Court in Probate No. 19712 documents entitled “Appearance of Barbara Cox Glover” and “Election to Take.” The appearance of the widow requested “that a sale of the ranch be ordered and allowed by the court,” and in the “Election to Take” the widow specifically stated that she “elects to take her dower.”

11. The widow consented to the sale of the Kahuku Ranch and orally agreed to join in the deed of the property to the purchaser and to release her dower interest therein in order to vest in the purchaser complete title, upon the express condition that the value of her dower interest be admeasured in appropriate proceedings and paid to her as provided by Hawaii law.

12. On May 22,19,58, the present plaintiff filed in the Circuit Court in Probate No. 19712 a memorandum in which the plaintiff represented to the court that there were insufficient available assets, other than the ranch, to pay the taxes, administration expenses, and creditors’ claims. The memorandum represented that the widow and the two children, who were the only living contingent remaindermen, all requested that the sale of the ranch be authorized.

13. On June 4, 1958, the Circuit Court, after notice of hearing, authorized the executor to sell the Kahuku Eanch. On June 4,1958, the court filed its decision, in which the court stated that the evidence disclosed the need for the sale of the ranch, that inquiries as to the ranch indicated an amount could be realized in excess of the appraised value, and that the funds so received would be sufficient to pay debts (other than the claim of James W. Glover, Limited, against the estate), administration expenses, and taxes. The court further found that the provisions of the will directing that the Kahuku Eanch should not be sold “cannot prevent a sale of the land where such sale is necessary to pay debts, administration expenses and taxes.” The adjudication of the court was (1) that the sale was necessary to secure funds for expenses of administration, family allowance, estate and inheritance taxes, and debts of the estate; (2) that under § 317-27, Eevised Laws of Hawaii, 1955, the sale could be authorized despite the provisions of the will; and (3) that the property should be sold at private sale in accordance with the requirements of Act 258, Session Laws 1957 (now § 317-27-29, Eevised Laws oe Hawaii, 1955, as amended).

14. The executor thereafter solicited offers for the Kahuku Eanch, including the real property and all improvements situated thereon, all livestock and equipment, and all other property used in the operation of the ranch.

15. In the solicitation of offers to purchase the ranch, the plaintiff included the approximately 1,003 acres of land owned by Eeed S. Glover and Eve Glover. As this land had been used for several years as an integral part of the operation of the Kahuku Eanch, Eeed S. Glover and Eve Glover agreed that such land should be included in the sale as a part of the ranch, and further agreed that the sum of $50,000 of the proceeds of the sale of the ranch, would be accepted by them as the sales price of the approximately 1,003 acres of land included in the sale.

16. Two bids were submitted for the Kahuku Ranch, the higher one, in the amount of $1,363,630, being submitted by the trustees under the wiM and of the estate of Samuel M. Damon, deceased (hereinafter called “the trustees”).

17. The trustees allocated their bid as follows: cattle and livestock, $364,500; buildings, electric plant, tools, motor vehicles, and other ranch equipment, $50,000; fences, $75,000; water system $100,000; and the land, $774,130.

18. (a) On August 26, 1958, the executor filed a petition in Probate No. 19712 for confirmation of the sale of the Kahuku Ranch to the trustees. On September 19, 1958, the probate court issued an order confirming the sale. In the verified petition for confirmation of the sale, it was represented to the court that the widow consented to the sale of the Kahuku Ranch and had agreed that her dower interest in the real property could be sold so as to vest in the purchaser a complete title; that without a sale of the dower interest, a sale of the Kahuku Ranch could not be made; that the dower could not be set apart in kind without great injury to the estate; and that the value in money of the dower interest of the widow should be admeasured in appropriate proceedings upon the completion of the sale. The order confirming the sale contained the statement that the widow’s counsel stated to the court that the widow “will join in the deed of the real estate and convey her dower interest therein in order to vest in the purchaser complete title, upon the express understanding that the value of her dower interest would be paid to her, after said dower shall have been admeasured in appropriate proceedings brought in accordance with statutory provisions.” The order directed the present plaintiff to make the sale and to deliver a deed upon receipt by the plaintiff of the purchase price.

(b) Under the date of October 29,1958, the present plaintiff conveyed the real property to the purchaser, and the widow joined in the deed, remising, releasing, and quitclaim-ing all of her estate, right, title, and interest in the ranch, by way of dower or otherwise, to the purchaser.

19. On April 26,1960, the widow her complaint against the present plaintiff for admeasurement of dower in the Kahuku Ranch, thereby initiating the suit which was Civil No. 6216. On February 14, 1961, the widow filed her amended complaint in Civil No. 6216, and represented to the court that she had consented to the sale of the Kahuku Ranch and had agreed that her dower interest in it could be sold so as to vest complete title in the purchaser, .and that she had joined in the deed, and had sold and conveyed her dower interest in the ranch, upon the express understanding that the value of her dower interest would be admeasured in appropriate proceedings and that, upon the determination of the value of her dower interest in the real estate, the amount thereof would be paid to her.

20. (a) In a decision dated June 5,1962, the Circuit Court determined that the portion of the sales price of the Kahuku Ranch allocable to the real estate in which the dower right of the widow had been sold was $949,130; that the widow was entitled to have paid to her, out of the sales price for the real estate, an amount determined to be a fair equivalent for her dower interest therein; and that the widow’s dower in the proceeds of sale “is to be and hereby is admeasured at the date of sale of said real estate.” The court computed the value of the widow’s dower in the proceeds of sale by determining her life expectancy from her age (35 years, 9 months, and 22 days) on the date of the sale of the ranch. The value of her dower so computed was $212,529.39. The court also allowed the widow interest on the $272,529.39 from the date of the sale of the ranch.

(b) The Court’s judgment, which was entered on June 5, 1962, required the present plaintiff to pay the widow the sum of $272,529.39, with interest in the amount of $24,972.06.

21. On May 29, 1958, the plaintiff filed with the District Director of Internal Revenue in Honolulu a United States Tax Return, Form 706, for the estate of James W. Glover, deceased. The return included in the gross estate the Kahuku Ranch, which was designated as improved real property and unimproved real property, and which was valued in the return for estate tax purposes at $542,438. The return disclosed a total gross estate of $2,830,707.34; total allowable deductions, except the specific exemption, of $1,159,950.70; and an estate tax liability thereon of $502,146.01. In the return, the plaintiff did not claim any marital deduction in respect to the widow’s dower in the Kahuku Ranch land.

22. The estate tax liability of $502,146t,01 reported on the return was paid to the District Director of Internal Revenue, Honolulu, Hawaii, in accordance with a prior agreement with the District Director and in the following manner: a partial payment of $300,000 was made on the date of the filing of the estate tax return, i.e., May 29,1958; and the balance of $202,-146.01, plus interest of $2,398.06, or a total of $204,544.07, was paid on September 18,1958.

23. Subsequent to the filing of the estate tax return and payment of the tax due, as shown thereon, an examination was made by the Internal Revenue Service and a report was transmitted to the plaintiff under the date of March 14,1961 by the Audit Division of the Internal Revenue Service, Honolulu, Hawaii, stating adjustments proposed by the examining officer. Among the adjustments proposed in this report was the addition of $725,227 to the value, for estate tax purposes, of the Kahuku Ranch, which had been valued in the estate tax return at $542,438. The report did not allow as a deduction any amount with respect to the widow’s dower interest in the Kahuku Ranch.

24. On April 27, 1961, the plaintiff executed a Form 890, “Estate Tax Waiver of Restrictions on Assessment and Collection of Deficiency and Acceptance of Overassessment,” whereby it consented to the assessment and collection of a deficiency of $402,291.83; and on April 28, 1961, the plaintiff paid the deficiency of $402,291.83, together with interest of $70,108.99 thereon as provided by law, or a total of $472,400.82. Thereafter, on May 12, 1961, the deficiency of $402,291.83 was duly assessed by the District Director of Internal Revenue, Honolulu, Hawaii.

25. (a) On May 31, 1961, the plaintiff filed a claim for refund with the District Director of Internal Revenue, Honolulu, Hawaii, in the amount of $358,767.98, or greater amount as might be determined to be payable, plus interest.

(b) The plaintiff’s claim for refund shows two separate and distinct issues, only one of which is involved in this action. The issue involved here is the plaintiff’s claim that the estate should be allowed a marital deduction for the amount paid to the widow pursuant to the admeasurement proceedings before the Circuit Court. The other issue involved in the claim for refund was an interpretation of the laws of the State of Hawaii as to whether the statutory interest of the widow in lieu of dower in personal property should be one-third of the personal property remaining after the payment of debts but before the deduction of the amount of United States estate tax and Hawaii inheritance tax payable by the estate of the decedent. The other issue has since been finally determined by a decision of the Supreme Court of Hawaii {In re Estate of James W. Glover, Dec’d., 45 Haw. 569 (1962)). The amount of the refund which the plaintiff seeks to recover in this action is the amount of tax (with proper interest) attributable to the disallowance of the $272,529.39 claimed marital deduction and the adjustment relating to the recovery (if any) thereof.

26. The plaintiff is the sole owner of the claim involved in this action, and has not assigned or transferred the whole or any part thereof. No part of the claim has been paid by the defendant.

27. By certified mail dated June 5, 1963, the District Director of Internal Eevenue notified the plaintiff of the dis-allowance in full of the plaintiff’s claim for refund.

28. The Internal Eevenue Service has disallowed the claim of the plaintiff for a marital deduction for estate tax purposes in the amount of $272,529.39 of cash which was awarded to the widow pursuant to the judgment referred to in finding 20.

CoNolusion op Law

Upon the foregoing findings of fact and opinion, which are adopted by the court and made a part of the judgment herein, the court concludes as a matter of law that the plaintiff is entitled to recover, and judgment is entered to that effect. The amount of the recovery will be determined in accordance with Hule 47 (c). 
      
       If the decedent’s will Rad made provision for the widow, she could nevertheless have elected to take her dower interest in lieu of taking under the will.
     
      
       The plaintiff did not claim, and the Internal Revenue Service did not allow, any marital deduction with respect to the widow’s dower interest in any of the other real estate owned by the decedent at his death. Only two parcels of the other real estate were sold by the plaintiff, and they were sold after the expiration of the statutory period within which the plaintiff could have filed a claim for refund with respect to the estate tax paid.
     