Court Opinion

ID: 9420264
Source: CourtListenerOpinion
Date Created: 2023-08-02 22:53:33.373333+00
Date Added: 2024-06-11T17:22:23.386167
License: Public Domain

Mr. Justice Reed,
concurring in No. 3, Spiegel v. Commissioner, post, p. 701, and dissenting in No. 5, Commissioner v. Church, ante, p. 632.
As these tax decisions may have an influence on subsequent decisions beyond the limited area of the issues decided, I have thought it advisable to state my position for whatever light it may throw. I agree with the judg*652ment directed by the Court in Spiegel v. Commissioner and with so much of the opinion as rests solely upon the controlling effect of the possibility of reverter under the law of Illinois. As I disagree with Church v. Commissioner, decided today, I cannot accept so much of the opinion in the Spiegel case, p. 705, as seems to put reliance upon the fact that the settlor as trustee retains any “possession or enjoyment” of the trust, other than a possibility of reverter. I am opposed to the view expressed in the dissent written by Mr. Justice Burton that the settlor’s intent rather than the effect of his acts is the touchstone to determine the taxability of his property for estate tax purposes.
So far as Commissioner v. Church is concerned, I do not believe that May v. Heiner, 281 U. S. 238, should be overruled. The Joint Resolution of March 3, 1931, therefore, stands as the determinative factor in reaching a conclusion as to the taxability of the Church estate. Hassett v. Welch, 303 U. S. 303, decided that the Resolution was not retroactive. Consequently, the Church estate is not subject to an estate tax because of the reservation of a life estate.
We are asked to accept an overruling of May v. Heiner, supra, and also, I think, of Reinecke v. Northern Trust Co., 278 U. S. 339, not to mention the incidental fall of Hassett v. Welch, supra, on the one side, or, on the other hand, to limit the rule as to the possibility of reverter in Helvering v. Hallock, 309 U. S. 106, and the numerous cases that follow its teaching, to reverters expressly reserved in the documents. Legislation indicates a purpose to promote gifts as a desirable means for early distribution of property benefits. In reliance upon a long-settled course of legislative and judicial construction, donors have made property arrangements that should not now be upset summarily with no stronger reasons for doing so than that former courts *653and the Congress did not interpret the legislation in the same way as this Court now does. Judicial efforts to mold tax policy by isolated decisions make a national tax system difficult to develop, administer or observe. For more than thirty years Congress has legislated upon this problem and this Court has interpreted the enactments so that now what seems to me a reasonably fair interpretation of tax liability under § 811 (c) of the Internal Revenue Code, as now written, has been worked out. Relying upon the desirability of stare decisis under the decisions concerning § 811 (c), I would leave such changes as may seem desirable to the Congress, where general authority for that purpose rests.
(1) A provision including in a decedent’s estate the value at time of death of interest in any transfer by trust “in contemplation of or intended to take effect in possession or enjoyment at or after his death” has been in the federal estate tax law since the Income Tax Act of 1916.1 It will be noted that the phrase relating to a transfer “in contemplation of or intended to take effect in possession or enjoyment at or after his [settlor’s] death” has not changed. It was construed by this Court, at first, to apply to those circumstances where something passed *654from the “possession, enjoyment or control of the donor at his death.” Reinecke v. Northern Trust Co., 278 U. S. 339, 348. “Of course it was not argued that every vested interest that manifestly would take effect in actual enjoyment after the grantor’s death was within the statute.” Shukert v. Allen, 273 U. S. 545, 547. When, after the execution of a trust, the settlor “held no right in the trust estate which in any sense was the subject of testamentary disposition,” this Court was of the opinion that the gift was not intended to take effect in possession or enjoyment at the donor’s death. Helvering v. St. Louis Union *655Tr. Co., 296 U. S. 39, 43; Helvering v. City Bank Farmers Trust Co., 296 U. S. 85, 88; Burnet v. Northern Trust Co., 283 U. S. 782; Morsman v. Burnet, 283 U. S. 783; McCormick v. Burnet, 283 U. S. 784; May v. Heiner, 281 U. S. 238. A reserved power of appointment or change is, in a sense, a testamentary power over the corpus. Reinecke v. Northern Trust Co., supra, at 345; Porter v. Commissioner, 288 U. S. 436.
Klein v. United States, 283 U. S. 231, brought doubt into the above conception of the meaning of the phrase in question. That trust was to A for life and on condition that A survive the donor to A in fee simple. It was the death of the donor that “brought the larger estate into being . . . and effected its transmission from the dead to the living,” this Court said in upholding the tax on the trust property. This was construed by four members of the Court to mean that the donor’s death “operating upon his gift inter vivos not complete until his death, is the event which calls the statute into operation.” Mr. Justice Stone, dissenting in the later case of Helvering v. St. Louis Trust Co., supra, 46. The two positions, one that only power in the settlor at the time of death to cause the property to be transferred from him to another by will or by descent or to select beneficiaries through appointment brought the property formerly transferred within the reach of the words “intended to take effect in possession or enjoyment at or after his death,” the Reinecke concept, and the other that, in addition, every possibility of reversion of the transferred interest to the settlor must be barred by the trust instrument, the dissenter’s ground in Helvering v. St. Louis Trust Co., were fully discussed in the majority and dissenting opinions in Helvering v. Hallock, 309 U. S. 106.2 The latter *656position was accepted as the sound interpretation by us and I adhere to that view for the reasons stated in the Court’s opinion in Helvering v. Hallock. Cf. Eisenstein, Estate Taxes and the Higher Learning of the Supreme Court, 3 Tax Law Rev. 395. That interpretation has gained strength from the fact that Congress has not repudiated it as inconsistent with the legislative purpose and by other judgments by this Court applying the principles of the Hallock case in accordance with this statement. Fidelity-Philadelphia Trust Co. v. Rothensies, 324 U. S. 108; Commissioner v. Estate of Field, 324 U. S. 113. Possession or enjoyment of property as heretofore applied has meant from the standpoint of the taxability of the transferor’s estate, at least, that the death of the transferor perfects the right of the transferee and cuts off any possibility of reverter to the transferor left by the instruments of transfer. If the transferor *657reacquired the property by inheritance or by purchase, other factors would enter. Before the Joint Resolution even the reservation of a life estate was insufficient to preserve possession or enjoyment in the transferor as nothing passed at his death. When words such as “possession or enjoyment” used in a section of a revenue statute with their many possible shades and ambiguities of meaning have been given definition through the course of legislation and litigation, a change by courts should be avoided.3 By the Resolution such a reservation or that of power of appointment was also made the source of an estate tax.
Prior cases have involved trust instruments where the settlor specifically reserved remainders, reverters or contingent powers of appointment. In these cases the value at death of the entire corpus of the trusts was taxed. This was because in each case there was a contingency through which completed gifts of the entire corpus to the beneficiaries might fail before the death of the settlor with the result that the settlor would again control the transfer of the corpus.'4 In such circumstances, I take it as settled that the property is taxable on the event of the settlor’s death under §§ 810 and 811 (c). Cf. 324 U. S. at 111.
The trust instruments in the present cases of the Spiegel and Church estates do not specifically provide for such possibility of reverter or for regaining control of the devolution of the property. The issue raised by these cases is whether a like possibility of reverter springing not from the instrument but by operation of law through the failure of all beneficiaries named in the trust instru*658ment shall have the same effect. All named beneficiaries in these two trusts might die before the settlors without surviving issue. Thus, depending upon the controlling state law, the settlors might repossess the estates.5
To lay bare the heart of the problem, it seems helpful to put aside certain phases of possible congressional intention and possible statutory meaning, as not involved or heretofore decided for sound reasons.
A. It was not the purpose of Congress at any time in dealing with the inclusion of transfers of property in trust to have the whole value, at the donor’s death, of the total of all gifts made during life, included in the settlor’s *659estate for estate tax purposes.6 The words of the statute show this. See note 1, supra. Gifts in trust are taxable only where an interest remains in the donor. Therefore a gift by A to a trust company to hold in trust for B during B’s life and at B’s death to C, his heirs, devisees or assigns is not taxable under §811 (c). Reinecke v. Northern Trust Co., supra, 347-48. Before the amendment of 19317 the retention of an estate for life in the settlor did not subject the trust to estate tax where the remainder was taken by beneficiaries without regard to future action by the settlor.8
B. The Joint Resolution of 1931 made no change in the language of the subsection of the estate tax relating to the inclusion in estates of interests in trusts intended to take effect in possession or enjoyment at or after death. Neither the resolution nor the discussion on the floor of either house suggested a change in the words of the section to define what is meant by an interest intended to take effect after death. Congress aimed at the retention of life interests, not at this Court’s determinations of the meaning of “possession or enjoyment.” Those words were left untouched and an addition was made providing for the inclusion in the estate of interests where the settlor had retained the possession or enjoyment of the property or a right to income or the power to designate the beneficiaries. See note 1, supra. Therefore the words relating to intention, death, possession or enjoyment have the same meaning now as they did *660before the 1931 amendment was adopted.9 The doctrine of May v. Heiner that the statute, as written when that case was, handed down, did not cover reservations of life interests and powers of designation was legislatively changed by adding the words of the Joint Resolution. See in accord Helvering v. Hallock, supra. When Hallock there refers to the doctrine of May v. Heiner discarded by Congress, it is the doctrine of May v. Heiner that a settlor might reserve a life interest that was meant. Hallock did not say or imply, as I read it, that the May v. Heiner doctrine, which is supported by Reinecke and Shukert v. Allen, as to when “possession or enjoyment” passes from a donor was changed by the Resolution. These cases had held that something must pass from the settlor. The only difference wrought by Hallock on this concept of possession and enjoyment was to apply the Klein rule that the enlargement of the remainder estate did effect a transmission from the dead to the living.
Assuming that Congress might have legislated so that the added words would apply to the estates of all who died after the passage of the Joint Resolution, Congress definitely manifested an intention that the amendments were not to apply to trusts created prior to the Resolution though the settlor might die subsequently thereto. This whole matter is discussed thoroughly and, I think, unanswerably in Hassett v. Welch, 303 U. S. 303, and I can add nothing to the argument. Attention, however, *661should be called to the statements on the floor of the House by members of the Committee on Ways and Means at the time of the passage of the Joint Resolution.10 Mr. Hawley, Chairman of the Committee, answering a question as to the nature of the Resolution said, “It provides that hereafter no such method shall be used to evade the tax.”
Mr. Garner of the same Committee stated:
“The Committee on Ways and Means this afternoon had a meeting and unanimously reported the resolution just passed. We did not make it retroactive for the reason that we were afraid that the Senate would not agree to it. But I do hope that when this matter is considered in the Seventy-second Congress we may be able to pass a bill that will make it retroactive.”
And in answer to a question, he reiterated, “I have strong hopes that the next Congress will make it retroactive.” Congress never took any subsequent action and this Court’s interpretation of the meaning of “intended to take effect in possession or enjoyment” remained the same. The addition to the section made by the Joint Resolution made certain future gifts inter vivos, which would theretofore have been free of estate tax, subject to such a tax.
C. As a corollary to the foregoing section B, it is clear to me also that Congress by the Joint Resolution made no change in the statute for the purpose of bringing trusts into an estate merely because the actual use of the estate or its income by the cestui que trust was postponed until the death of the donor. Shukert v. Allen, supra.
D. It is impossible for me to look upon the Spiegel or Church trust as closely akin to a will. The decisive *662difference is that a will may be changed at any time during life, while these trusts obliterated any power in the settlors to change or modify the devolution. Only the chances of death, wholly beyond their control, might put the disposition again in their hands. Further, during life the settlors must handle the trusts for the benefit of all beneficiaries. They were not free to do as they pleased as would have been the case of a will. Of course, if the settlor had made similar provision for the objects of his bounty by will, in effect at death, the result to the takers would have been the same; or if, in the Spiegel case, the father had annually given his children the same sums that the trust earned, their economic position would have been the same for that year but the children could not look forward with certainty to their annual income from the trust. Without the trust, the beneficiaries’ income would have been subject to the wish of the settlor. It needs no argument or illustration to show that a father’s gift from his income is a very different thing from an irrevocable gift of principal to a child.
Returning to the issue in these present cases, the difference between them and Helvering v. Hallock and its progeny is that here the possibility of reverter arises by operation of law whereas in them the possibility arises out of the terms of the trust. That difference I do not think is material as to taxability under § 810 and § 811 (c). Granting that in early interpretations of the sections this Court might logically have determined that remote possibilities of reverter did not interfere with the beneficiaries’ complete possession and enjoyment of the gift during the lifetime of the donor, the balance of experience and precedent, since Helvering v. Hallock, tips the scale the other way in my judgment. It is important, though not decisive, since we are not justified in pushing every rule to its logical extreme, that this conclusion is a *663logical outgrowth of the Hallock rule. Since we know it is the purpose of Congress to put an estate tax on gifts intended to take effect at or after death, the interpretation of those words should be broad enough to accomplish the purpose effectually. “Intended to take effect,” in that view, has for me the meaning of an intention to abide by the legal result of the terms of the trust.
I recognize that this interpretation has possibilities of variation in result through the employment of technicalities of property law. The addition of a phrase may make the difference between a completed or an incom-pleted gift. To make the intention of the settlor the determinative factor creates equal difficulties. Nor am I unmindful of this Court’s effort, in which I joined, in the Hallock case to find a harmonizing principle for the difficulties engendered by § 811 (c). In that case the principle applied was that a tax lies against an estate when the death of the grantor brings a larger estate into being for the beneficiary. This does accomplish uniformity in the interpretation of the section of federal law. Hallock attempted nothing more. It leaves its application to particular trusts dependent upon state determination of when a settlor has divested himself of every possible interest in the res of a trust.11 We are *664dealing with a statute and Congress is fully competent to correct any misunderstanding we may have of the congressional intention.
(2) The foregoing leads to the conclusion in the Spiegel case that this estate must, pay a federal estate tax on the trust res unless that res, under the law of Illinois, would have passed to the heirs at law or the legatees of the last descendant of the settlor. If under Illinois law the estate returned to the settlor on his surviving all his descendants, the tax is due. The possibilities of this happening in this case are extremely remote but a trust might have been created by a young son for an aged mother to pay her the income for life and at the settlor’s death to pay her the principal.
The Court of Appeals concluded (159 F. 2d at 259) that “If none of the beneficiaries survived the settlor, and that was a possibility, then the trust failed, and the trustees would hold the bare naked title to the corpus as resulting trustees for the settlor.” There is no Illinois case holding squarely on this point, and in the absence of such a determination by a state court we do not interfere with a reasonable decision of the circuit which embraces Illinois. Helvering v. Stuart, 317 U. S. 154, 164; MacGregor v. State Mutual Life Assurance Co., 315 U. S. 280. The rule followed by the Court of Appeals accords with that generally accepted. Restatement, Trusts § 411; 3 Scott, Trusts §411; 2 Bogert, Trusts and Trustees § 468; Harris Trust & Savings Bank v. Morse, 238 Ill. App. 232; Lill v. Brant, 6 Ill. App. 366, 376.12
*665The taxpayer relies upon cases wherein the language of wills was construed in order to create vested remainders. These cases, however, do not overturn the firmly settled principle that where an express trust fails for lack of a beneficiary, a resulting trust in favor of the settlor arises by operation of law.13 To vest property under a will or deed is desirable. To vest property under a trust may not be. It is more reasonable to return trust property to the settlor on failure of the trust than to have it go to the heirs of the beneficiary.
From a reading of the trust instrument involved in the instant case, it is manifest that the settlor did not intend to grant his children the power to dispose of their respective shares should they predecease the settlor with*666out issue. The settlor specifically named as beneficiaries of the trust his children and grandchildren. That he intended to restrict the trust to these two classes of beneficiaries is evidenced by the provision of the instrument that in the event of the death of a child without issue that child’s share was to be added to the shares of the settlor’s surviving children. His retention of the trusteeship and failure to grant the power of disposition to his children in his lifetime negative any intention of the settlor to exclude the possibility of a reversion of the trust property to himself.
No error appears in the conclusion of the Court of Appeals on this point.
(3) Finally, the situation in the Church case must be dealt with. The trust was created in New York by a resident of New York who died a resident of New Jersey. Two of three trustees were at all times residents of New York where the stocks and accounts of the trust were kept. From what is before me, I would assume that the New York law would control as to the possibility of the retention of an interest by the settlor. This produces a variant from the Spiegel case. The determination of New York law will be made by a circuit that does not include that state. This, I think, is not significant in determining the course to be followed.
As the Court of Appeals for the Third Circuit made its decision on the authority of the Dobson rule, 161 F. 2d 11, it did not consider the effect of Hassett v. Welch, 303 U. S. 303. As May v. Heiner stands, in my opinion, trusts, like the Church trust, created prior to the passage of the Joint Resolution of March 3, 1931, are not includable in the gross estate of a settlor for federal estate tax purposes unless there is a possibility of reverter to the settlor by operation of the controlling state law. To determine this question, I would vacate the judgment *667of the Third Circuit and remand the case to that court to determine the state law.
I would affirm No. 3, Spiegel v. Commissioner; I would vacate No. 5, Commissioner v. Church.

 This provision first appeared in § 202 (b) of the Revenue Act of 1916, 39 Stat. 756, 777-78, and read as follows:
“That the value of the gross estate of the decedent shall be determined by including the value at the time of his death of all property, real or personal, tangible or intangible, wherever situated:
“(b) To the extent of any interest therein of which the decedent has at any time made a transfer, or with respect to which he has created a trust, in contemplation of or intended to take effect in possession or enjoyment at or after his death, except in case of a bona fide sale for a fair consideration in money or money’s worth. . .
With small changes it was included in § 402 (c) of the Revenue Acts of 1918 and 1921, 40 Stat. 1057, 1097; 42 Stat. 227, 278, and in *654§ 302 (c) of the Revenue Acts of 1924 and 1926, 43 Stat. 253, 304; 44 Stat. 9, 70. In 1931 the provision was amended by H. J. Res. No. 529, 46 Stat. 1516, and assumed its present form in the Revenue Act of 1932, 47 Stat. 169, 279. It now reads as follows:
“The value of the gross estate of the decedent shall be determined by including the value at the time of his death of all property, real or personal, tangible or intangible, wherever situated, except real property situated outside of the United States—
“(c) Transfers in contemplation of, or talcing effect at death.
“To the extent of any interest therein of which the decedent has at any time made a transfer, by trust or otherwise, in contemplation of or intended to take effect in possession or enjoyment at or after his death, or of which he has at any time made a transfer, by trust or otherwise, under which he has retained for his life or for any period not ascertainable without reference to his death or for any period which does not in fact end before his death (1) the possession or enjoyment of, or the right to the income from, the property, or (2) the right, either alone or in conjunction with any person, to designate the persons who shall possess or enjoy the property or the income therefrom; except in case of a bona fide sale for an adequate and full consideration in money or money’s worth. . . .” The italicized words are the additions made by the amendments of 1931 and 1932 to § 302 (c) of the Revenue Act of 1926. See Hassett v. Welch, 303 U. S. at 307-308. The underscored phrase at the end of the first paragraph was added by the Revenue Act of 1934, § 404, 48 Stat. 680, 754. There has been no further change.

 Whether the taxable event is the “transfer inter vivos,” as we suggested in Helvering v. Hallock, 309 U. S. 106, 111, see Shukert *656v. Allen, 273 U. S. 545, 546, and Fidelity-Philadelphia Trust Co. v. Rothensies, 324 U. S. 108, 110-11, or the transfer at death, as now seems to me more precise, seems immaterial. See Int. Rev. Code § 810; dissent in Helvering v. St. Louis Trust Co., 296 U. S. 39, 46-47; Reinecke v. Northern Trust Co., 278 U. S. 339, 347. It was said of a transfer in contemplation of death, “It is thus an enactment in aid of, and an integral part of, the legislative scheme of taxation of transfers at death.” Milliken v. United States, 283 U. S. 15, 23; Heiner v. Donnan, 285 U. S. 312, 330, cf. dissent at 334. In either case transfer of an interest in property intended to take effect in possession or enjoyment at or after death is taxed. If taxed as an excise on the privilege of transfer at death, the transferee has taken subject to the tax. Int. Rev. Code § 827 (b). It is a means of checking tax avoidance. Cf. Milliken v. United States, 283 U. S. 15, 20. See Helvering v. Bullard, 303 U. S. 297, an estate tax on a trust that retained a life estate. We there said, pp. 301-2, “A further vindication of the exaction is the authority of Congress to treat as testamentary, transfers with reservation of a power or an interest in the donor.” See Fernandez v. Wiener, 326 U. S. 340, 352; cf. Heiner v. Donnan, 285 U. S. 312, 331-32.

 National Safe Deposit Co. v. Stead, 232 U. S. 58, 67.

 Helvering v. Hallock, 309 U. S. 106; Fidelity-Philadelphia Trust Co. v. Rothensies, 324 U. S. 108; Commissioner v. Estate of Field, 324 U. S. 113; Goldstone v. United States, 325 U. S. 687.

 Since the state law defines and creates rights and interests in property and the federal taxing statutes only say which of these rights and interests created by state law shall be taxed, the law of Illinois controls the construction of this trust. Helvering v. Stuart, 317 U. S. 154, 161-63; Blair v. Commissioner, 300 U. S. 5, 9-10.
The trustee in the Spiegel case could act only in the interest of the beneficiaries of the trust.
It is well established in Illinois as in other jurisdictions that a trustee in the absence of express authority cannot deal on his own behalf with any part of the trust property. Doner v. Phoenix Joint Stock Land Bank of Kansas City, 381 Ill. 106, 45 N. E. 2d 20; Kinney v. Lindgren, 373 Ill. 415, 26 N. E. 2d 471; City of Chicago v. Tribune Co., 248 Ill. 242, 93 N. E. 757; and in determining the powers of the trustee reference must be had to the intention of the grantor as manifested in the whole trust instrument. Crow v. Crow, 348 Ill. 241, 180 N. E. 877; Bear v. Millikin Trust Co., 336 Ill. 366, 168 N. E. 349; Harris Trust & Savings Bank v. Wanner, 326 Ill. App. 307, 61 N. E. 2d 860. Even though a trustee has been vested with full power and discretion as to the management of the trust he is still subject to the control of the equity court, and this discretion cannot be exercised by the trustee so as to defeat the trust or to deprive the cestui que trust of its benefits. Maguire v. City of Macomb, 293 Ill. 441, 127 N. E. 682; Jones v. Jones, 124 Ill. 254, 15 N. E. 751. This rule that the trustee must administer the trust solely in the interest of the cestui que trust has the support of both reason and authority. See Helvering v. Stuart, 317 U. S. 154, 162-66; Restatement, Trusts § 170; 2 Scott, Trusts § 187.

 This statement does not refer to the items of deduction or exemption covered by Int. Rev. Code § 812 but to the value of gifts not covered by § 812 that also are not covered by § 811.

 46 Stat. 1516.

 May v. Heiner, 281 U. S. 238; Burnet v. Northern Trust Co., 283 U. S. 782; Morsman v. Burnet, 283 U. S. 783; McCormick v. Burnet, 283 U. S. 784.

 Why “possession or enjoyment of . . . the property” was put in the amendment to the section I do not know. It reads as if Congress intended to make it clear that the possession or enjoyment of the property was a basis for taxation. Such result would have followed from the original language. That is probably why no cases have been called to our attention that have turned on the use of these words in the amendment.

 74 Cong. Rec. 7198-99.

 Helvering v. Stuart, 317 U. S. 154, 161-62:
“When Congress fixes a tax on the possibility of the revesting of property or the distribution of income, the ‘necessarj’’ implication,’ we think, is that the possibility is to be determined by the state law. Grantees under deeds, wills and trusts, alike, take according to the rule of the state law. The power to transfer or distribute assets of a trust is essentially a matter of local law. . . . Congress has selected an event, that is the receipt or distributions of trust funds by or to a grantor, normally brought about by local law, and has directed a tax to be levied if that event may occur. Whether that event may or may not occur depends upon the interpretation *664placed upon the terms of the instrument by state law. Once rights are obtained by local law, whatever they may be called, these rights are subject to the federal definition of taxability.”

 The Illinois Annotations to the Restatement of the Law of Trusts, § 411, says that the rule of the Restatement “states the law,” but no case has been found where the trustee holds the corpus upon a *665resulting trust for the settlor because of the failure of the inter vivos trust. See Restatement, Trusts, Ill. Anno. § 411, comment (b).
In view of the uncertainties surrounding the theory that the burden of proof is on the taxpayer to show that the Commissioner of Internal Revenue is in error as to the law applicable to an assessment of a deficiency, I do not depend upon that theory to support the judgment of the Court of Appeals. See Helvering v. Leonard, 310 U. S. 80; Helvering v. Fitch, 309 U. S. 149; cf. Helvering v. Stuart, 317 U. S. 154, dissent, 172; 2 Paul, Federal Estate and Gift Taxation, § 14.47, n. 4 and 1946 Supp.; 9 Mertens, Law of Federal Income Taxation 285-86.

 In Chater v. Carter, 238 U. S. 572, this Court considered the following language whereby an inter vivos trust was created. “The trust for Lottie Lee is to cause the dividends to be paid to her during the three years from January 1st next and if she shall then be living to transfer the shares to her.” The cestui que trust died before the expiration of the three-year period and the question arose as to whether the heir of the cestui que trust or the estate of the settlor was to receive the corpus. This Court considered it unnecessary “to strain the meaning of words, as is sometimes done to avoid intestacy when wills are to be construed.” It concluded that the trust having failed, the trustee must redeliver the corpus “to him from whom it came. In other words, there is a resulting trust for the donor.”