Document: 380 U.S. 678 85 S.Ct. 1238 14 L.Ed.2d 159 COMMISSIONER OF INTERNAL REVENUE, Petitioner.v.ESTATE of Marshal L. NOEL, Deceased, William H. Frantz and Ruth M. Noel, Executors. No. 503. Argued April 1, 1965. Decided 29, John B. Jones, Jr., Washington, D.C., for petitioner. Harry Norman Ball, Philadelphia, Pa., respondents. Mr. Justice BLACK delivered the opinion Court. 1 This is a federal estate tax case, raising questions under § 2042(2) Internal Revenue Code 1954, 26 U.S.C. (1958 ed.), which requires inclusion in gross decedent amounts received by beneficiaries other than executor from 'insurance policies on life decedent' if 'possessed at his death any incidents ownership, exercisable either alone or conjunction with person. * *'1 The presented this case are whether certain flight insurance payable upon accidental insured were 'on he had reserved 'incidents ownership' policies. 2 These issues emerge following facts. Respondent Noel drove her husband their home to New York International Airport where was take an airplane Venezuela. Just before taking off, signed applications two round-trip policies, aggregating $125,000 naming wife as beneficiary. Mrs. testified that she paid premiums $2.50 each then instructed sales clerk 'give them my wife. They hers now, I no longer have anything do them.' gave kept. Less three hours later Noel's plane crashed into Atlantic Ocean all others aboard killed. Thereafter companies face value not included return filed executors. Commissioner determined proceeds should been Tax Court sustained determination, holding accident decedent'; possessed death; beneficiary therefore includable estate. 39 T.C. 466. Although agreeing decedent's right assign change amounted 'exercisable ownership within meaning statute,' Appeals nevertheless reversed, given 'its ordinary, plain generally accepted meaning,' statutory phrase 'policies does apply account like those here. 332 F.2d 950. court's reason drawing distinction contract insurer 'agrees pay specified sum occurrence inevitable event,' whereas covers risk 'which evitable likely occur.' (Emphasis supplied.) F.2d, 952. Because importance authoritative answer these administration laws, we granted certiorari decide them. 379 927, 330, 13 340. I. 3 In 1929, 36 years ago, Board Appeals, predecessor Court, held Ackerman v. Commissioner, 15 B.T.A. 635, 'amounts insurance' because deceased.2 recognized 'there between insurance, former insuring against event latter contingencies *.' now us considered 'inevitable' 'evitable' be crucial significance statute. did not, stating 'we fail see why one taken out policy-holder much other. assumed loss insured's life, payment money contingent life.' view wholly consistent language statute itself makes events only comes way time. Even less clear, since Appeals' it has settled administrative practice include estates decedents. Treasury Regulations remain unchanged time decision3 day Congress never attempted limit scope decision established construction 2042(2), although re-enacted section amended respects number times.4 We many cases such longstanding interpretation, applying substantially statute, deemed congressional approval effect law. See, e.g., National Lead Co. United States, 252 140, 146, 40 237, 239, 64 L.Ed. 496; States Dakota-Montana Oil Co., 288 459, 466, 53 435, 438, 77 893. hold here called 'flight 'life insurance,' 2042(2). II. 4 executors' second contention even decedent,' owned completely, incident so make While clearly spelled out, rests alternative claims: (a) purchased them; (b) her, thereby depriving himself power beneficiary; (c) assuming contractual change, illusory could possibly exercised interval take-off fatal crash Atlantic. 5 bought solely testimony furnished purchase, intending preserve continue Accepting claim supplied buy own benefit (which decide), what nonetheless policy contracts containing agreements companies. themselves without consent. Therefore very terms rebut became complete, unconditional owner irrevocable 6 assigned thereafter stands better provided nor changed written endorsement No assignment endorsed consequently remained death. 7 Obviously, there practical opportunity boarded died. That too short possession home. circumstances disabled him moment exercising over undoubtedly his. Death intervened temporary disability removed. But same said about man owning ordinary who matter man's exercise property while crash. It would stretch imagination think intended measure liability individual's fluctuating, day-by-day, hour-by-hour capacity dispose owns. 'with respect depends general, legal regard owner's ability particular moment. Nothing policyholder divest proper gift assignment, bar its What transfer made involved. judgment reversed affirmed. 8 ordered. 9 Judgment 10 DOUGLAS dissents. '§ 2042. Proceeds insurance. 'The shall property— '(1) Receivable executor. 'To extent amount receivable decedent. '(2) beneficiaries. *' Section 302(g) Act 1924, applicable Ackerman, 'under 43 Stat. 253, 304 305. CFR 20.2042—1(a)(1). See also Treas.Reg. 105 (1939 Code), 81.25; 80 (1934 Art. 25; 70 (1926 ed. 1929 68 (1924 63 (1922 27; 37 (1921 32. 2042 first enacted 402(f) 1918, c. 18, 1057, 1097—1098. 1921, 136, 42 227, 278—279; 234, 304—305, 1926, 27, 44 9, 70—71; 811(g) 1939.

Category: 11