Humes v. United States
| Decision Date | 09 April 1928 |
| Docket Number | No. 376,376 |
| Citation | 276 U.S. 487,72 L.Ed. 667,48 S.Ct. 347 |
| Parties | HUMES et al. v. UNITED STATES |
| Court | U.S. Supreme Court |
Under Revenue Act 1918, § 403, par.(a), subpar. 3 (Comp. St. § 6336 3/4 d), present value of contingent bequests to charities in will, as determined by combination and adjustment of mortality tables as to whether 15 year old girl would marry, or, if she did, would die without issue before age of 30, 35, or 40, is not deductible from gross amount in determining value of net estate in computing estate tax, since neither taxpayer nor revenue officer could do more than guess at value of contingency.
Mr. A. Lowry Humes, of New York City, for petitioners.
[Argument of Counsel from page 488 intentionally omitted] Mr. W. D. Mitchell, Sol. Gen., of Washington, D. C., for the United states.
[Argument of Counsel from page 489 intentionally omitted] Mr. Justice BRANDEIS delivered the opinion of the Court.
This action was brought in the Court of Claims by the executors of Dellora R. Gates to recover $120,508.50, a part of the estate tax alleged to have been illegally exacted under the Revenue Act of 1918, c. 18, § 403, 40 Stat. 1057 1098 (Comp. St. § 6336 3/4 d). The basis of the claim is that a sum of $482,034, which was disallowed in ascertaining the net estate taxable, should have been deducted from the gross amount of $11,783,072.30 disposed of by article fifty-first of the will. The sum disallowed represents the alleged present value of certain contingent bequests to charities made by that article. The question for decision is whether the alleged present value of such contingent bequests is deductible under section 403, par. (a), subpar. 3, of the Revenue Act. The Court of Claims held that the Commissioner of Internal Revenue was right in refusing to allow the deduction. 63 Ct. Cl. 613. This court granted a writ of certiorari. Mitchell v. U. S., 275 U. S. 515, 48 S. Ct. 37, 72 L. Ed. —.
The governing provision of the act is:
'That for the purpose of the tax the value of the net estate shall be determined-(a) In the case of a resident, by deducting from the value of the gross estate-* * * (3) The amount of all bequests * * * to or for the use of any corporation organized and operated exclusively for * * * charitable * * * purposes.'
Allowance of the deduction was denied pursuant to Treasury Department Regulations 37, art. 56, which declared:
Article fifty-first of the will gives one-half of the residuary estate to the testatrix's trustees in trust for her niece, Dellora F. Angell, portions of the principal to be paid to her upon her attaining the ages of 30 and 35 years, the balance to be paid to her upon her attaining the age of 40, the income to be paid to her in the meantime. In the event that the niece should die without issue before attaining the age of 40, the amount of the principal not paid to her was given to charities. The remaining half of the residue was to be held in trust for the testatrix's brother during his life, the principal to be disposed of on his death in like manner as the half first mentioned. The testatrix died in 1918. Dellora F. Angell was then living, was 15 years old, and was unwarried. The contention of the executors is that the bequests gave the charities a present property right in the estate; that the present value of a property right which is dependent upon some future event may be determined by the use of standard mortality and experience tables and by the calculations and...
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