De Lappe v. Commissioner of Internal Revenue
113 F.2d 48
5th Cir.
1940
Check Treatment

*2 upon of net imposes a the transfer 302, 26 every of decedent. Section Int.Rev.Acts, 227, provides: page estate of the dece- “The value Arthur A. Moreno Gaudin, and Felix W. determined dent shall be Orleans, La., both New petitioners. prop- of his time Hanson, S. Dee Key, Sewall and Miss personal, tangible intangi- erty, real Carloss, Sp. Helen R. Atty. Assts. ble, wherever To the extent situated — Gen., Clark, Samuel Jr., Atty. O. Asst. therein of the decedent at Gen., Wenchel, and Counsel, P. Chief J. * * * death; To (g) Bureau of Revenue, Internal Ralph amount receivable Staubly, Sp. F. Atty., Bureau of Internal policies as insurance under taken executor Revenue, C., both of D. life; the decedent his own respondent. $40,000 excess over FOSTER, Before other bene- HOLMES, Circuit Judges. as insurance ficiaries by the his life.” FOSTER, Judge. application involved an In this case the undisputed. community facts laws of the state of Cyprian Sporl, A. senior, Washington. died As to there is no intestate in Orleans, New on January Washington ence between community, marital regard under the law Louisiana in- law of Loui- life siana, had existed between Washington himself that under his widow, deLappe, petitioner. Adrienne if a life insurance policy payable Dur- ing existence of community, the husband can had taken out six insurance on her without consent. value, at his aggregating immaterial in this case as the husband did $100,990, three one to not un- sons, each petitioners, two der the herein Treasury involved. mother, to his with the Regulations 70 and remainder force when to two sisters. All the quoted pertinent died. husband the head provisions Treasury Act, prop dispose identical promulgated the 1924 (cid:127) erty But treated the consent provisions approval and in for the com acts as having Congressional doing them as mean- found to discuss *3 Pfaff, changes intro- the Bender ing, validity or effect the whole. v. also, 252; See, held that It was 51 75 Regulations duced S.Ct. L.Ed. by Pfaff, Cir., 649; Washing- Bender F.2d 13 5 community under statutes v. 38 the Review, Tulane Taxation of ton com- Law one-half of the amounts the applied applied to the payments of Life Ins. As Community funds wife; case, with the in if the husband miums this was beneficiary, changed the under the- out fraud had the beneficiaries where she is Regulations quoted, person, she a third the wife would have words of the be- proceeds policy had If had came no redress. entitled surrendered proportion paid; in them and received the cash funds value the community property. would have Had where children were named beneficiaries been vyere community those funds in other invested turn, community precise funds the situation is in would the not.within property. Regulations; words In Louisiana estate the the of a de the rather heirs, instantly cedent directly vests the obvious reason the definition underlying 'personal in his what constitutes a the by out representative, inas other states. La.Civil respected. insured should be Code, is no Arts. 940-945. There need for opinion signifi- concludes with this accept the elect to administration heirs cant statement. “In the absence of a clear the succession without it. declaration cannot be assumed that Con- The Board cited Newman v. 5 gress bought intended insurance Cir., 449; Sizeler, F.2d Sizeler v. 170 the funds of another than the 388; Douglass So. La. v. insured and not to the latter’s es- Co., Equitable Life La. tate, Ins. 90 So. should be reckoned as of such 834. The Newman so far as it was purposes estate for of taxation.” the Lang conflict with The Board concluded the Su longer authority. no overruled and In preme Court decided the Lang case Sizeler, Sizeler held that it was authority the of Treasury took the of the insurance on the and, since the case bar comes under life of the husband virtue of by the con- 80,1 the decision tract not as community In point. consider We de marriage that case the illegal was cided the case on the statute and reference and, although law of Louisiana the ma- was incidental. In Loui jority is not clear On point, this present, has a vested inter doubtful existed at est in one-half of the Douglass Equitable Co., In Life Ins. expectancy. a mere Upon the with the consent the beneficiary death of the husband she not take changed had been policy pledged inheritance in her own as owner. to secure a debt. held 1 “Treasury Regulations Ed., decedent, cases, promulgated under application, the Revenue Acts of makes if he pays directly 1932 as 1926 and Amended: either or indi- rectly, paid by person Taxable “Art. 25. insurance. —The stat- provides gross beneficiary, possesses for the inclusion in than ute or decedent legal insurance taken dece- policy. Legal as follows: incidents of owner- by, ship example: All estate; (b) of, all other benefit insur- of the insured oí estate to it exceeds in ance to the its economic aggregate $40,000. rpfers policy, assign- it,-to ‘insurance’ term life in- revoke an every description, including pledge ment, or to obtain paid by fraternal beneficial death benefits from the insurer a loan the sur- operating lodge sys- societies, render value of the etc.” Insurance to be taken tem. is considered La.Civii iiave pledge in violation of as was void Code, prohibits pledge acting agent. husband is Neces- Art. sarily the hus- debt of the local law into and by band, wife to secure the enters becomes part of regulation receive entitled tó in cases where wife was applies. policy. must be construed in light Bank & Berry v. Franklin State Co., Trust 186 La. So. originally wife was his execu- changed husband to estate of the decedent tors or administrators. shall be determined the value * by divorce and a settlement * * was dissolved *4 made the interest therein of at decedent in the insurance not included In computing death. change settlement. The taxes on the of life insurance the divorce until made divorce question to be decided is the dece whether funds. paid miums were paid premiums. all or only death divorced After husband’s unimportant It is bank, as ad- against the brought suit separate receives ministrator, set aside settlement or as community In either policies. The fraud and recover of com held, and was aside it was set settlement one-half of the Loui- after review an extensive dece cost authorities, proceeds of that half. dent has the other case one-half belonged to of which was only one-half. Regulation 80 could did not treasury elementary a is this. it the law but can 25 of judgment down Art. strike is is allowed. of de purpose and the No. is reversed cause of the Board follow proceedings case. The not in- ciding this further remanded for attempts to de wherein opinion. the law consistent with policy, as ownership in follows: fine ownership policy in the “Legal incidents (dissent- Judge right of the in example: The ing)- economic his estate to sured opin- expressions change the in the power there While it, which taken out Lang cancel the ion surrender context, assignment, to'pledge support a lend to the view the to revoke their announces, a insurer loan the Newman case obtain or to majority overruled, policy.” against surrender value has been whole, opinion, in my a read as ownership are These support view. pre merely create not conclusive cited in Newman Though the ownership sumption be re case was not re- Lang the briefs instance, right of the in butted. I opinion, which shows ferred to economic benefits sured his estate to the think, correctly one-half applies in Louisiana two cases were concluded ent, proceeds, policy resting the law property. The bene case on that of the Newman ficiary; policy; obtain from insurer loan and to that the Newman case has not Believing surrender of the could overruled, and that correct given to an authority, law, on its I statement these respectfully dissent. instances, on a policy where