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106

ROBERTS, J., dissenting.

in possession or enjoyment at or after death. This court said (p. 243):

At the death of Mrs. May no interest in the property held under the trust deed passed from her to the living; title thereto had been definitely fixed by the trust deed. The interest therein which she possessed immediately prior to her death was obliterated by that event." [Italics supplied.]

It will be noted that this is the equivalent of the Treasury's statement, supra, that such an interest lapses at death.

That decision is indistinguishable in principle from the St. Louis Union Trust Company cases and the instant cases; and what was there said serves to distinguish the Klein case.

McCormick v. Burnet followed May v. Heiner. The court there held that neither a reservation by the grantor of a life estate with remainders over, nor a provision for a reverter in case all the beneficiaries should die in the lifetime of the grantor, made the gifts transfers intended to take effect in possession or enjoyment at or after the grantor's death. In the Circuit Court of Appeals the Commissioner urged that the provision for payment of the trust estate to the settlor in case she survived all the beneficiaries rendered the transfer taxable. That court dealt at length with the point and sustained his view. (43 F. 2d 277, 279.) The Commissioner made the same contention in this court, but it was overruled upon the authority of May v. Heiner.

Then came the two St. Louis Union Trust Company cases, decided upon the authority of May v. Heiner and McCormick v. Burnet. Finally, the McCormick case was followed in Bingham v. United States, 296 U. S. 211.

Since the opinion of the court appears to treat the St. Louis cases as the origin of the principle there announced,

ROBERTS, J., dissenting.

309 U.S.

it is important to emphasize the fact that the rule had been settled by this court as early as 1930; and to note other decisions rendered prior to the St. Louis cases. In seven, intervening between May v. Heiner and the St. Louis cases, the Board of Tax Appeals reached the same conclusion as that announced in the St. Louis cases." The Board's action was affirmed in four of them. Four other decisions by Circuit Courts of Appeals were to the same effect. In practically all, reliance was placed upon Shukert v. Allen, Reinecke v. Northern Trust Company, May v. Heiner, and McCormick v. Burnet, or some of them. Thus, when the question came before this court again in the St. Louis cases, there was a substantial body of authority following and applying the Heiner and McCormick cases.

Since the St. Louis cases were decided, the principle on which they went has been repeatedly applied by the Board of Tax Appeals and the courts. The Board has

followed the cases in no less than seventeen instances.

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Wheeler v. Commissioner, 20 B. T. A. 695; Duke v. Commissioner, 23 B. T. A. 1104; Peabody v. Commissioner, 24 B. T. A. 787; Dunham v. Commissioner, 26 B. T. A. 286; Taylor v. Commissioner, 27 B. T. A. 220; Wallace v. Commissioner, 27 B. T. A. 902; Bonney v. Commissioner, 29 B. T. A. 45.

"Commissioner v. Duke, 62 F. 2d 1057 (affirmed by an equally divided court, 290 U. S. 591); Commissioner v. Wallace, 71 F. 2d 1002; Commissioner v. Dunham, 73 F. 2d 752; Commissioner v. Bonney, 75 F. 2d 1008.

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Commissioner v. Austin, 73 F. 2d 758; Tait v. Safe Deposit & Trust Co., 74 F. 2d 851; Tait v. Safe Deposit & Trust Co., 78 F. 2d 534; Helvering v. Helmholz, 64 App. D. C. 114; 75 F. 2d 245. I have been able to find only one case decided contra: Commissioner v. Schwarz, 74 F. 2d 712.

Taft v. Commissioner, 33 B. T. A. 671; Guaranty Trust Co. v. Commissioner, 33 B. T. A. 1225; Kneeland v. Commissioner, 34 B. T. A. 816; Kienbusch v. Commissioner, 34 B. T. A. 1248; Schneider v. Commissioner, 35 B. T. A. 183; Van Sicklen v. Commissioner, 35

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ROBERTS, J., dissenting.

The record is the same in the courts. The St. Louis cases have been followed in fourteen cases." In some of these the Government has sought review in this court but in none, except those now presented, has it asked the court to overrule those decisions.

If there ever was an instance in which the doctrine of stare decisis should govern, this is it. Aside from the obvious hardship involved in treating the taxpayers in the present cases differently from many others whose cases have been decided or closed in accordance with the settled rule, there are the weightier considerations that the judgments now rendered disappoint the just expectations of those who have acted in reliance upon the uniform construction of the statute by this and all other federal tribunals; and that, to upset these precedents now, must necessarily shake the confidence of the bar and the public in the stability of the rulings of the courts and make it impossible for inferior tribunals to adjudicate controversies in reliance on the decisions of this court. To nullify more than fifty decisions, five of them by this.

B. T. A. 306; Patterson v. Commissioner, 36 B. T. A. 407; Rushmore v. Commissioner, 36 B. T. A. 480; Bryant v. Commissioner, 36 B. T. A. 669; Wetherill v. Commissioner, 36 B. T. A. 1259; Mitchell v. Commissioner, 37 B. T. A. 1; Stone v. Commissioner, 38 B. T. A. 51; The George D. Harter Bank v. Commissioner, 38 B. T. A. 387; White v. Commissioner, 38 B. T. A. 593; Donnelly v. Commissioner, 38 B. T. A. 1234; Pyeatt v. Commissioner, 39 B. T. A. 774; Dravo v. Commissioner, 40 B. T. A. 309.

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Old Colony Trust Co. v. United States, 15 F. Supp. 417; Myers v. Magruder, 15 F. Supp. 488; Chase National Bank v. United States, 28 F. Supp. 947; Commissioner v. Brooks, 87 F. 2d 1000; Bullard v. Commissioner, 90 F. 2d 144; Welch v. Hassett, 90 F. 2d 833; United States v. Nichols, 92 F. 2d 704; Mackay v. Commissioner, 94 F. 2d 558; Commissioner v. Grosse, 100 F. 2d 37; Commissioner v. Hallock, 102 F. 2d 1; Commissioner v. Kaplan, 102 F. 2d 329; Rothensies v. Cassell, 103 F. 2d 834; Corning v. Commissioner, 104 F. 2d 329; Rheinstrom v. Commissioner, 105 F. 2d 642.

215234-40-9

ROBERTS, J., dissenting.

309 U.S.

court, some of which have stood for a decade, in order to change a mere rule of statutory construction, seems to me an altogether unwise and unjustified exertion of power. As I shall point out, there is no necessity for such action because it has been, and still is open to Congress to change the rule by amendment of the statute, if it deems such action necessary in the public interest.

3. Section 301 of the Revenue Act of 1926 imposes a tax upon the value of the net estate of a decedent. Section 302 provides the method for determining the value of the gross estate. Subsections (c) (d) (e) (f) and (g) require inclusion in the gross estate of interests which otherwise might be held not to form a part of the decedent's estate or not to pass from him to others at his death. These subsections sweep such interests into the gross estate in order to forestall tax avoidance. Section 302 (c) was the successor of analogous sections in earlier acts and the predecessor of similar sections in later acts.1o The subsection has been amended in successive Revenue Acts. As a result of the Treasury's experience in the enforcement of the law, Congress has from time to time. thought it necessary to extend the scope of the subsection in the interest of more efficient administration. Within constitutional limits such extension is a matter of legislative policy for Congress alone.11

It is familiar practice for Congress to amend a statute to obviate a construction given it by the courts. The legislative history of § 302 (c) demonstrates that Congress has elected not to make such an amendment to

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Revenue Act of 1916, § 202 (b), 39 Stat. 756, 777; Revenue Act of 1918, § 402 (c), 40 Stat 1057, 1097; Revenue Act of 1924, § 302 (c), 43 Stat. 253, 304; Revenue Act of 1932, § 803 (a), 47 Stat. 169, 279; Internal Revenue Code of 1939, § 811 (c), 53 Stat., Part 1, 1, 121.

"Helvering v. City Bank Farmers Trust Co., 296 U. S. 85.

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ROBERTS, J., dissenting.

meet the construction placed upon it by this court in the St. Louis cases.

May v. Heiner was decided in 1930. The Treasury was dissatisfied with the decision and in three later cases attacked the ruling, amongst them McCormick v. Burnet. The court announced its judgments in these cases on March 2, 1931, reaffirming May v. Heiner. On the following day Congress adopted a joint resolution amending § 302 (c) to tax a transfer with reservation of a life estate to the grantor, but, in so doing, it omitted to deal with a contingent interest reserved to the grantor or the possibility of reverter remaining in him, involved in both Heiner and McCormick. See Hassett v. Welch, 303 U. S. 303, 308-9. The omission is significant.

It may be argued that in the haste of preparing and passing the amendment the point was overlooked. But the joint resolution was reenacted by § 803 of the Revenue Act of 1932,12 without any alteration to cover the point. The Revenue Act of 1934 13 amended § 302 (d) of the Revenue Act of 1926 but did not change § 302 (c) as it then stood.

The day the St. Louis cases were decided, this court announced its opinion in White v. Poor, 296 U. S. 98, construing § 302 (d) of the Act of 1926. In order to make the section apply to such a situation as was disclosed in that case 14 the Congress, on June 22, 1936, by the Act of 1936,15 amended it to preclude the construction the court had given it. Again Congress let § 302 (c) stand as before and as construed in the St. Louis cases.

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