275 F. 814 | 7th Cir. | 1921
(after stating the facts as above). The government contends that the 4l/¡ per cent. Third Riberly Bonds, not having been held at least six months prior to the death, are not under the terms of section 14 receivable in payment of the estate tax. The executrix maintains that the time deceased held the 4 per cent, bonds should be reckoned in the holding period, in which case it would exceed the six months.
It goes without saying that unmatured obligations of the government are not generally receivable in payment of taxes which the government levies. If this were not so, the very object of making longtime loans might be frustrated through thus requiring the government to pay these obligations far in advance of the time for which it was deemed necessary for the government to use the borrowed funds. It is evident that the receivability of such unmatured obligations in payment of any taxes due the government enhances the desirability of the obligation as an investment, and facilitates their sale. But it is for the government by its legislation expressly to fix the conditions and terms upon which its unmatured obligations may be so receivable, which conditions and terms may not by implication or construction be extended beyond the plain provisions of the statute fixing them.
Section 14, under which alone there is provision for receivábility of these bonds for taxes due the government, prescribes that “any bonds
It was to the interest of the government to maintain the standing of its previous bond issue, as bearing upon the desirability of its obligations generally, and the facility .with which future loans might be floated at times of great stress. To this end means were provided, through provisions for conversion, whereby the holders of the prior loan might convert them into bonds of the third issue. But there is nothing in the situation to suggest an intention to grant to holders of the converted bonds any larger or better privilege or immunity in this respect than would be enjoyed by those who would subscribe for the third issue, and we find nothing in the wording of section 14 from which it would follow that the time of prior holding of the 4 per cent, bonds may be added to the time following their conversion into 4% per cents in order to fulfill the statutory requirements of six months’ continuous holding of the latter before the right of receivability for federal estate taxes arises.
It is insisted for appellee that section 14, so construed, would work such unwarranted discrimination against that class of holders whose death occurred within the six months period after the issue of the bonds'as to render unconstitutional so much of section 14 as made possible such result. We fail to see any merit whateyer in the contention. The classification was reasonable and proper to be made. In this respect it treated all persons alike, for, while “no man knoweth the day of his death,” the uncertainty is not peculiar to any class, but is present with all persons. The six months provision would have the tendency of inducing in every one a disposition to hold at least so many of the 4% per cent, bonds as might be deemed necessary to meet the estimated amount of a federal estate tax in case of death, and thus tend to pre
We are of opinion that section 14 requires the holding of the 4% per cent, bonds, however acquired, to have been for a time not less than six months next preceding the death, in order to be receivable, in payment of the federal estate tax. This conclusion is in harmony with the rulings of the Treasury Department on the same question.
The decree is reversed, with direction to sustain the government’s demurrer, and to dismiss the bill.