*1 amended, OF INTERNAL of the Revenue Act of COMMISSIONER NAT. AMERICA 232. NUE BANK OF ASS’N. & TRUST SAVINGS August Elisha Cobb 1937. will, His which had been made earlier year, only same his near kin declared that Ninth Circuit Court of sister, Mayo, was his and that S. uppermоst her To welfare was in his mind. this sister the testator devised his home personal goods with the household property contained therein. There were specific bequests persons, other to various $3,500. totaling By bequeathed clause Sixth testator respondent trust, in the residue bank, of his following estate directions: my “From the said trust aforesaid trustee shall the sum of Two Hundred Fifty per my month Re- dollars Mayo, payments S. run said my death, date of and in she should, by accident, illness, judg- in such additional sum or sums as necessary and ment of sаid trustee existing conditions.”' reasonable under the directed, upon the death of The trustee liquidate the entire estate proceeds pay over the to named organizations. Mayo’s was- The estate $114,853.37. estate re- the federal tax filed the executor deduction heading, $93,776.70 was claimed public gifts.1 Com- of charitable аnd toto. missioner disallowed the held with The Board redetermination the executor. time of decedent’s death Rebecca At the Gen., seventy-ninth year. Her Clark, Atty. was in hеr Jr., Asst. O. Samuel Carloss, greatly impaired. In 1935 eyesight Key, Morton K. Helen R. Sewall performed Gibson, operation on both Rothschild, Sp. an had and Lester L. eyes and in Gen., petitioner. glaucoma, her for Atty. Assts. to for operation right eye on her been an for Francisco, Julien, Edward Hale of San activities were con- a cataract. Her Cal., respondent. greatly restricted because of tinued to GARRECHT, Before age her advanced and the condition of Judges. Circuit HEALY, right sight. owned her own She lived, $3,500; valued at home which HEALY, Judge. approxi- and bonds valued at also stocks mately accounts decision of bank Petition to review a deposits totaling $7,400. Appeals. question is with excess of Board of Tax testamentary during income from these gifts to admitted Her assets whether approximately Her ex- remainder, termination $900. charities after during year housekeeper, penses are so uncer- food, clothing, and miscellaneous be allowable as deductions tain as $1,450. approximately (3) purposes were taxes under computing estate present worth, computed apparently their assumed 1 The value mortality basis of on the tables. *2 754= monthly al- 73 Since decedent’s death the L.Ed. is more nearly akin the to present. has at of to lowance There the $250 wife was the paid from the out of income times of the life, authority income corpus, composed being part the of on trust stocks, latter the of the trustee to use from the bonds, principal of mon- and a small amount any sum necessary suitably ey. adjustments After certain and the de- maintain the wife “in as much comfort as expenses duction of administration and state she enjoys.” now thought the court аnd income federal income the net standard was sufficiently fixed and was ca- corpus years pable of the trust the 1937 to of being stated in definite terms of 1937,$4,814.67; 1940was as follоws: money, and that “there uncertainty was no $5,298.79; $3,995.77; $4,872.51. appreciably greater than general the uncer- annually by The accounts filed the trustee tainty that attends human affairs.” distinguished principal income and and al- The case before us greater exhibits no ways $3,000 the annual indicated allowance uncertainty. At the decedent’s death the charge against as a income account. Re- expectancy life of the sister was brief.3 Mayo deposited in her ac- Her mode of and the restriсted greater part counts for accumulation the of sphere of activities were known. She monthly these payments. independent means, amount, modest in The taxing permits statute the deduction true, it is but substantial for one in her bequests estate of charitable of expenses situation. Her living were well the kind made here. The Commissioner monthly within her, the sum allowed even argues where, here, bequest that the is if her own disregarded; resources be and to an life the ex- annuity the fixed so substantial legal to invade the cor- istence of the ly less than the net income the trust of invasion, possibility pus, mere of or the of almost accu that an excess fund the deduction. The to defeat sufficient Board, ending years with 1940. in the four mulated however, opinion that on the was of to meet Large sums were thus available the trus- facts the case the of of as illness or ac circumstances such unusual corpus, even into sur- delving tee’s into cident, inva probability of an the
plus income, so inconsiderable as to cоrpus remote indeed. sion of render the discretion; sister’s was left to the Nothing capable of definite ascertainment. of the trustee meet discretion We do nоt understand that court contingencies confined designated States, Humes 276 U.S. 48 v. United reasonably expenditure of what was to necessary; L.Ed. or United States S.Ct. Co., v. Provident Trust S .389, Naturally, arising announced such under this stat- 78 L.Ed. has cases .Ct hard for which the probability; fast rule as that present gradations ute However, contends. in two Commissioner sug- understood as wе do not wish to be ap recent cases decided the court bequests in remain- gesting that charitable peals of the first circuit the he advanc where is real likе- are deductible der acceptance.2 appears es haps Per to have found part of undetermined the cor- lihood distinguishable on cases are for the benefit of life pus being taken facts, the in the Gammons case their duty is the Commission- tenant. It principal satis permitting statute, administering give but the “desire” of only the nеeds fy not purpose Congress, effect to beneficent tenant, Merchants Nation proper performance a believe we involving a discretion to usе Bank al paid duty requires that attention be supply the “comfort principal each-case. The actualities of administra- happiness” the life annuitant. way dоing difficultiesin the are and/or tive Trust, v. F. G. Bonfils Commissioner hand, On the other insurmountable. not blind adherence to support po Cir., tends F.2d arbitrary standards must Board. sition of many instances the needless result legislative policy. -frustration Company Trust v. of Ithaca The case States, judgment of the Board is affirmed. 279 U.S. S.Ct. United respondent’s Hassett, Cir., is stated brief and F.2d It v. Gammons Na- is not denied that Rebecca Merchants and Commissioner v. Boston, Cir., 132 F.2d tional Bank November change I think Judge (dissenting). Congress failure it must be held is a that the a deduction The statute authorizes Reynolds R. the statute. political divisions J. bequests to amount of Co., 306 U.S. 83 L. S.Ct. purposes and subdivisions for Winmill, *3 Ed. scien- religious, charitable, 45, 59 S.Ct. L.Ed. 52. Under the ap- specified рurposes. The tific and other regulation, existence of provide if plicable regulations pay the sister in or in the entire prop- empowered “trustee is divert 'principal, is sufficient to defeat the deduc fund, part, use erty to a or in whole or tion, regardless of exer purpose have or which would rendered powеr. cise of that pow- extent that it is such directly so The decision not it been should deductible had be reversed. devised, by dece- bequeathed, or por- dent, limited tion, any, property if or fund which exempt power”. is an exercise such the trustee Under terms trust was directed “in case should, illness, by accident, COMMISSIONER OF INTERNAL such additional sum or as sums NUE v. SAGINAW & MANISTEE necеssary judgment of said trustee CO. LUMBER existing under the condi- reasonable tions.” Seventh empow- Circuit Court It is obvious that the trustee is ered to to or for divert is if applied permis- the dеduction claimed is not the'regula- sible. It is contended that 50, Reg. Ed.) (1922 tion void. Art. promulgated under Act of Revenue 47, Reg. (1924 promul- Art. Ed.) gated under Act of Revenue 47, Reg. Ed.) promulgat- Art. (1926 ed undеr the Act Revenue Art. 47, Reg. (1934) promulgated Act sup- Revenue amended and plemented the Revenue Acts of pro- contain the identical quoted (3) vision above. Sеction the Revenue Act of Stat. § 303(a) (3) of the Revenue Act of Int.Rev.Acts, page U.S.C.A. (a) (3) of Revenue Act 26 U. Int.Rev.Acts, S.C.A. all contain practically provision identicаl one addition, question. In 401-404 of the §§ Revenue Act of 26 U.S.C.A. Int.Rev. 439; Acts, page 438, 401-403 of the §§ Act Revenue Rev.Acts, Int. 573-579; pages 401-406 of §§ Revenue Act of U.S.C.A. Int. 759-765; Rev.Acts, pages 201-203 §§ of the Revenue Act 26 U.S.C.A. 803-806, pages all made statutes, estate tax amendments of the but question them bears here none of involved. long-continued interprer by the regulation tation that statute