Court Opinion

ID: 8595976
Source: CourtListenerOpinion
Date Created: 2022-11-23 16:03:10.867932+00
Date Added: 2024-06-11T16:54:56.363955
License: Public Domain

Nichols, Judge,
concurring:
With a qualification to be stated, I join in Judge Kashiwa’s able opinion, which states all of the plaintiffs’ arguments and cuts each one down with meticulous care. I found the case on its facts an easy one, as our cases go, because I reached the same result by a shorter and well trodden route — the rule that courts will not construe a statute literally to produce absurd results beyond the known or probable intention of the Congress. Church of The Holy Trinity v. United States, 143 U.S. 457, 459 (1892). This principle obtains in interpretation of the United States revenue laws. Select Tire Salvage Co. v. United States, 181 Ct. Cl. 695, 386 F.2d 1008 (1967), and cases there cited. If Congress intended the value of the possibility of reverter immediately before death to be appraised on the basis of the causes that produced the death, it intended to introduce a joker in the statute, for the five percent exception would all but obliterate the rule. The only cases the rule would cover would be those of virtually instantaneous deaths, as, e.g., in homicides and other accidental deaths, and even then, if the victim lingered an hour or two before expiring, presumably the life expectancy and therefore the application of the five percent rule would be evaluated as of that period. As to people dying of disease in bed, it is easy to picture the tax lawyer and accountant hovering about the premises to make sure the decedent still breathed when the magic five percent point was passed. In many cases, the inquiries for the tax man to make would be grisly and macabre. If a person died by drowning, do you determine his life expectancy as of when he was already in the water? Would it depend on how long he remained afloat? Or whether he knew how to swim? Congress may occasionally legislate with tongue in cheek, but it is not capable of the black humor our plaintiffs impute to it.
When Congress said the reversion was to be evaluated "without regard to the fact of the decedent’s death” (see § 2037, text in Judge Kashiwa’s footnote 4), I am sure it meant without regard to the injury or illness that caused the death. When, e.g., the decedent had a long history of disease and degeneration and was then carried off by some *642unrelated cause, the consideration of the former condition, in determining life expectancy for application of the five percent rule, is not so absurd nor so contrary to the statutory language. That may have been the situation in Hall v. United States, 353 F.2d 500 (7th Cir. 1965). It is hard to tell whether the court deemed the massive cerebral hemorrhage that terminated the decedent’s life to have been a natural consequence of the long list of ailments that caused her final hospital admission fully four years previously. At any rate, the actuarial testimony for that plaintiff excluded from consideration not only the fact of death itself, but also "the immediate cause of her death.” Id. at 503. In our case it is conceded that decedent’s life expectancy was calculated by the executors with respect to the terminal illness from which she suffered and of which she died. Thus, the positions of the two estates were not identical, a circumstance that to some degree mitigates the starkness of the conflict we are going into with the Seventh Circuit. Neither their words nor ours, however, admit any difference in the two cases, nor do the Treasury regulations. For myself, I would like to limit my concurrence to the facts we actually are passing on.
The stipulation states that our decedent, Henrietta R. Allen, had a life expectancy of 14 weeks as of November 26, 1970. She died January 1, 1971. If there was any reason, under plaintiffs’ view of the law, for stating the expectancy as of so long before death, the court never learned what it was. Plaintiffs’ counsel asserted, or admitted, as one prefers, that he would be entitled to prevail, by his view, if the value of the reversion dropped under five percent only in the last day of life, only, perhaps, in the final hour. That is the position we are rejecting, but no way of backdating the determination can be suggested that is consistent with the statute’s requirement that the value of the reversion be fixed as of a time "immediately before death.”
Thus, the decisive consideration is that we are asked to sponsor an absurd interpretation of the statutes and regulations, absurd in this case and in any other when the decedent’s declining life expectancy in his or her final weeks, or days, or hours, resulted from the same cause as death itself resulted from.
*643CONCLUSION OF LAW
As previously mentioned, although it appears that Congress did not consider the problem of which method of valuation should be utilized to value reversions under § 2037, it did specifically authorize the Secretary to promulgate regulations setting forth methods of valuation which were to include mortality tables. Those regulations, which we believe are a reinforcement of congressional policy, neither exceed the scope of the delegated power nor are contrary to the statute; rather, we believe that those regulations reasonably require the use of the regulations’ actuarial tables to value a reversionary interest under § 2037 whenever life expectancy must be determined. Other methods of valuation may be used to determine the chance of the reversionary interest becoming operative in a particular situation only when actuarial principles cannot apply.
We subscribe to the position presented by the Tax Court in Estate of Roy v. Commissioner, supra, and reject the position adopted by the Seventh Circuit in Hall v. United States, supra. Accordingly, upon our foregoing opinion, which contains the essential findings of fact as stipulated by the parties, the court concludes as a matter of law that in valuing decedent’s reversionary interest the Commissioner did not err in failing to take into account the actual health and physical condition of the decedent and her sister; we dismiss plaintiffs petition.