Kelly's Trust v. Commissioner of Internal Revenue

FRANK, Circuit Judge.

The decision of the Tax Court turned on its determination that each of three trust-deeds established but a single trust. In so deciding, that court disregarded a decision of the New York Supreme Court (in a suit to which the United States was not a party) that each of those trust-deeds created multiple trusts. The reasons given by the Tax Court for disregarding the state-court decisions are these: The action in the state court was originally nonadversary and did not raise the question of the creation of multiple trusts; only after the present suits, raising that question,…