INDUSTRIAL TRUST CO. ET AL., EXECUTORS,
v.
UNITED STATES

U.S. | 1935-12-09
No. 213
296 U.S. 220 Supreme Court of the United States (1935) Negative Treatment
Also reported at: 80 L. Ed. 191 · 56 S. Ct. 182 · 1935 U.S. LEXIS 573 · SCDB 1935-031
Cited by 39 cases

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Synopsis

The estate of William M. Greene omitted a paid-up life insurance policy worth $42,000 from the federal estate tax return filed in 1930, and the Commissioner of Internal Revenue added it to the gross estate and declared a deficiency. The Supreme Court reversed the Court of Claims' decision and held that the insurance proceeds were not properly includable in the gross estate under the Revenue Act of 1926, finding that the statutory language was ambiguous and any application to these proceeds would raise constitutional concerns.

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Opinion of the Court
Mr. Justice Sutherland

Mr. Justice Sutherland delivered the opinion of the Court.

Petitioners, as executors of the estate of William M. Greene, who died in 1930, filed an estate-tax return and paid the amount of the federal estate tax disclosed thereby. A paid-up life-insurance policy of $42,000 was omitted from the return. The Commissioner of Internal Revenue declared a deficiency and included the amount of this policy in the gross estate. Petitioners filed a claim for refund, which was rejected by the commissioner. Thereupon, this proceeding was brought-in the Court of Claims to recover the amount of the claim. That court held against the right to recover and dismissed the petition.

The policy, issued in 1892, promised to make payment to the wife of the decedent, as sole beneficiary if living; and if not living, to the surviving children of the decedent; and, in the event of none surviving, then to the executors, administrators, or assigns of the decedent. In 1912, the policy became a paid-up policy requiring no further payment of premiums. No power was reserved to change beneficiaries, borrow on the policy or surrender it. The wife of the decedent predeceased him; but he was survived by three children, to whom the proceeds of the policy were paid upon his death.

The case of Lewellyn v. Frick, 268 U. S. 238, arose under the Revenue Act of 1918. This case arises under the act of 1926, § 302 (g), which is the same as § 402 (f) of the former act. Subdivision (h) of the 19;26 act, however, provides that subdivisions (b), (c), (d), (e), (f), and (g) shall apply to “ transfers, trusts, estates, interests, rights, powers, and relinquishment of powers, as severally enumerated and described therein, whether made, created, arising, existing, exercised, or relinquished before or after the enactment of this Act.” Whether any of these terms apply to an amount receivable by a beneficiary, under a policy such as we have here, is fairly debatable. See Wyeth v. Crooks, 33 F. (2d) 1018, 1019. If any of them do apply, the provision is open to grave doubt as to its constitutionality, and the rule of the Frick case controls. The foregoing facts bring the case clearly within our decision just announced in Bingham v. United States, ante, p. 211; and the judgment of the court below is accordingly

Reversed.

Cases With Similar Vibessemantic neighbors from the corpus

Citator

Cited By

  • Walker v. United States, 83 F.2d 103 (8th Cir. 1936)
    …ansfers inter vivos dependent upon and vesting only at death of the transferer. Bingham v. United States, 296 U.S. 211, 56 S.Ct. 180, 80 L.Ed. -, definitely determines this argument against appellee— see Industrial Trust Co. et al. v. United States, 296 U.S. 220, 56 S.Ct. 182, 80 L.Ed. -, and also see Becker v. St. Louis Union Trust Co., 296 U.S. 48, 56 S.Ct. 78, 80 L.Ed. - (a trust transfer inter vivos). Another reason advanced by appellee is that all life insurance is taxable because it “is per se testam…
    1 / 2
  • Commissioner of Internal Revenue v. Washer, 127 F.2d 446 (6th Cir. 1942)
    …construction beginning with Chase Nat’l Bank v. United States, 278 U.S. 327, 49 S.Ct. 126, 73 L.Ed. 405, 63 A.L.R. 388, and reannounced in Bingham v. United States, 296 U.S. 211, 56 S.Ct. 180, 80 L.Ed. 160, and Industrial Trust Co. v. United States, 296 U.S. 220, 56 S.Ct. 182, 80 L.Ed. 191, and by many decisions of District Courts and Circuit Courts of Appeals. The Supreme Court, however, in Helvering v. Hallock, 309 U.S. 106, 60 S.Ct. 444, 84 L.Ed. 604, 125 A.L.R. 1368, has dealt comprehensively with those…
  • Liebmann v. Hassett, 148 F.2d 247 (1st Cir. 1945)
    …, certiorari denied 321 U.S. 778, 64 S.Ct. 619, before it as our opinion had not at the time been issued. In that case we reviewed the decisions in Lewellyn v. Frick, supra; Bingham v. United States, supra; and Industrial Trust Co. v. United States, 296 U.S. 220, 56 S.Ct. 182, 80 L.Ed. 191, and concluded that “the Supreme Court has indicated by Helvering v. Hallock, 1940, 309 U.S. 106, 60 S.Ct. 444, 84 L.Ed. 604, 125 A.L.R. 1368, and United States v. Jacobs, 1939, 306 U.S. 363, 59 S.Ct. 551, 83 L.Ed. 763, t…

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