Morse v. Commissioner of Corporations and Taxation

• Decision Date: 09 February 1951
• Citation: 96 N.E.2d 706,327 Mass. 22
• Parties: MORSE v. COMMISSIONER OF CORPORATIONS AND TAXATION.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 706

96 N.E.2d 706

327 Mass. 22

MORSE v. COMMISSIONER OF CORPORATIONS AND TAXATION.

Supreme Judicial Court of Massachusetts, Suffolk.

Argued Jan. 5, 1951.

Decided Feb. 9, 1951.

R. G. Dodge, Boston (R. I. Hunneman, Boston, with him), for petitioner.

W. S. Kinney, Asst. Atty. Gen., for Commissioner of Corporations and Taxation.

Before QUA, C. J., and LUMMUS, WILKINS, SPALDING and WILLIAMS, JJ.

LUMMUS, Justice.

This is a petition by Anna B. Morse for abatement of a tax assessed by the respondent commissioner upon a gift of $335.927.44 in personalty which the petitioner's husband, Cabot J. Morse, gave to her on May 23, 1945, between one year and two years before his death on August 21, 1946. The Probate Court granted an abatement, on the ground that the gift was not made by Cabot J. Morse in contemplation of his death. The respondent commissioner appealed.

By G.L. (Ter.Ed.) c. 65, § 1, as amended, a tax was imposed upon all property which shall was 'by deed, grant or gift, except in cases of a bona fide purchase for full consideration in money or money's worth, made in contemplation of the death of the grantor or donor * * *,' with certain immaterial exceptions. General Laws (Ter.Ed.) c. 65, § 3, as amended by St.1939, c. 380, provides that 'Any deed, grant or gift completed inter vivos, except in cases of bona fide purchase for full consideration in money or money's worth, made not more than one year prior to the death of the grantor or donor, shall, prima facie, be deemed to have been made in contemplation of the death of the grantor or donor. Notwithstanding any provision of section one, no tax shall be payable thereunder on account of any deed, grant or gift in contemplation of death made more than two years prior to the death of the grantor or donor, unless made or intended to take effect in possession or enjoyment after such death.'

The meaning of the words, 'made in contemplation of the death of the grantor or donor,' has been settled in New England Trust Co. v. Commissioner of Corporations & Taxation, 315 Mass. 639, 53 N.E.2d 1001, and O'Donnell v. Commissioner of Corporations & Taxation, 317 Mass. 664, 60 N.E.2d 11. The object of the statute is to reach and tax substitutes for testamentary dispositions and thus to prevent the evasion of succession and inheritance taxes. The dominant motive of the gift, whether one associated with continued life, or one preparatory to expected death, determines the liability to taxation. The Probate Court found that...