Court Opinion

ID: 4471136
Source: CourtListenerOpinion
Date Created: 2020-01-09 22:03:02.551103+00
Date Added: 2024-06-11T15:03:14.645839
License: Public Domain

SteeNhageN, J dissenting: The essential question is whether May v. Heiner controls or whether the rationale of that case has been superseded by that of the Hallock case. I think the Hallock case is an expression of a conception which is more comprehensive than is recognized in the majority opinion, and that this conception is so inconsistent with May v. Heiner that the earlier opinion must be regarded as overruled by the later. This is what the Board held in Estate of Mary H. Hughes, 44 B. T. A. 1196; dismissed, C. C. A. 7th Cir., April 9, 1942, and I think that opinion should stand. The Board in the Hughes case did not assume the authority or have the temerity to overrule the decision of the Supreme Court in May v. Heiner. It did not essay to do so or think that it was doing so. It simply studied the Hallock opinion and, having reached the conclusion that it was in conflict with May v. Heiner (cf. the dissenting opinion of Mr. Justice Roberts), felt bound to follow the most recent view.1  I am unable to see how it can be denied that the possession or enjoyment of the property by one other than the decedent became definitely effective only upon the decedent’s death. In the trust which was modified after the Joint Resolution of March 3, 1931, the decedent had, until he died, the right to designate himself as a recipient of the income; in the other, he had until death the right to designate any one, other than himself. True, he had transferred the legal title to the trustee and had irrevocably named the remainder-man, so that the passing of title was not affected by his death. But the statute is concerned with the transfer not of legal title, but of effective possession or enjoyment of the property transferred. Literally, the property was within the gross estate under the 1926 statute, before the joint resolution; and, being property which decedent had transferred by a trust under which he had retained for life the right to designate the persons who shall possess or enjoy the income therefrom, it was squarely within the language of the statute in effect at the time of death (sec. 302 (c), Revenue Act of 1926, as amended by sec. 803 (a), Revenue Act of 1932). Cf. Commissioner v. Clise, 122 Fed. (2d) 998; certiorari denied, 315 U. S. 821. I would sustain the deficiency. TURNER, Hile, Harron, and Opper, JJagree with this dissent.   This subject has been carefully discussed in Mr. Paul’s book, Federal Estate and Gift Taxation, Vol. I, Chap. 7, particularly §§ 7.16 ; 7.24; 7.25; 7.32.