Source: https://supreme.justia.com/cases/federal/us/296/211/
Timestamp: 2019-04-19 18:56:46+00:00

Document:
1. Acts of Congress are to be construed, if possible, so as to avoid grave doubts of their constitutionality. P. 296 U. S. 218.
pledge or assign the policy, revoke the assignment made, or surrender the policy without the beneficiary's consent, even though, by the terms of the policy or assignment, if such beneficiary had not survived the decedent, the proceeds would have gone to the decedent's estate. Lewellyn v. Frick, 268 U. S. 238. Pp. 296 U. S. 217-219.
3. The title and possession of the beneficiary were irrevocably fixed by the terms of the policy or assignment, and no interest passed to the beneficiary as the result of the death of the insured. Helvering v. St. Louis Union Trust Co., ante, p. 296 U. S. 39; Becker v. St. Louis Union Trust Co., ante, p. 296 U. S. 48. P. 296 U. S. 219.
4. Matters pertinent to an issue before the court and which were clearly presented to it are to be taken as covered by the decision, though not mentioned in the opinion. P. 296 U. S. 218.
Certiorari to review a judgment reversing a judgment, 7 F.Supp. 907, in an action to recover the amount of a federal estate tax alleged to have been illegally exacted.
"(f) to the extent of the amount receivable by the executor as insurance under policies taken out by the decedent upon his own life, and to the extent of the excess over $40,000 of the amount receivable by all other beneficiaries as insurance under policies taken out by the decedent upon his own life. "
Petitioners are the executors of the will of King Upton, who died in 1921, while the Act of 1918 was in force. His wife survived him. Long prior to the passage of the Act, a number of life insurance policies were issued to the decedent, among them four issued by the Berkshire Life Insurance Company of Massachusetts, originally payable to his estate, and one issued in 1883 by the Connecticut Mutual Life Insurance Company of Connecticut, payable to the wife of the decedent with a condition that, in case of the predecease of the wife, the amount of the policy should be payable to his children, or, if there be no children or descendants of children then living, to the legal representatives of the insured. In 1904, decedent assigned the four Berkshire policies to his wife, "provided she survives me." The decedent had no power, none being reserved, to change the beneficiaries, to pledge or assign the policies after the assignment to his wife, or revoke that assignment or surrender the policies without the consent of the beneficiaries. Central Bank of Washington v. Hume, 128 U. S. 195, 128 U. S. 205; Miles v. Connecticut Life Ins. Co., 147 U. S. 177, 147 U. S. 181-183, compare dissent, p. 147 U. S. 188; Commonwealth v. Whipple, 181 Mass. 343, 63 N.E. 919; Pingrey v. National Life Insurance Co., 144 Mass. 374, 382, 11 N.E. 562.
After having deducted the specific exemption of $40,000, the Commissioner of Internal Revenue included the proceeds of these five policies in the decedent's gross estate for the purpose of the federal estate tax. An action was brought in a federal district court to recover the amount of the tax resulting from the inclusion of these proceeds. That court rejected the view of the Commissioner and awarded judgment to the taxpayers upon the authority of Lewellyn v. Frick, 268 U. S. 238; Bingham v. United States, 7 F.Supp. 907.
The Court of Appeals reversed, holding that the Frick case was distinguishable. United States v. Bingham, 76 F.2d 573. We think the view taken by the District Court is the correct one.
four classes of policies which were involved -- one class being policies, it was pointed out, made payable to the Frick estate "subsequently assigned by Mr. Frick to his wife or daughter if she survived him, without reserving power to revoke the assignments." This Court, without stopping to recite the various specific provisions that were thus clearly brought to its attention, held that the proceeds of none of the policies were subject to the estate tax under § 402(f). It fairly must be concluded that, in reaching that result, these provisions were considered, and that such of them as bore upon the problem there as well as here presented were found not to require a different determination. We think the points now urged by the government were decided in the Frick case, and find no reason to reconsider them.
2. The principles so recently announced by this Court in Helvering v. St. Louis Union Trust Co., ante, p. 296 U. S. 39, and Becker v. St. Louis Union Trust Co., ante, p. 296 U. S. 48, are decisive of the case in favor of the taxpayers. Those principles establish that the title and possession of the beneficiary were fixed by the terms of the policies and assignments thereof, beyond the power of the insured to affect, many years before the act here in question was passed. No interest passed to the beneficiary as the result of the death of the insured. His death merely put an end to the possibility that the predecease of his wife would give a different direction to the payment of the policies.
MR. JUSTICE BRANDEIS, MR. JUSTICE STONE, and MR. JUSTICE CARDOZO concur on the first ground stated in this opinion.
THE CHIEF JUSTICE concurs in this opinion, acquiescing in the second ground because of the recent decisions in the cases there mentioned.

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