Heiner v. Grandin

BUFFINGTON, Circuit Judge

(dissenting).

I am constrained to dissent in this ease for reasons I now state.

On the day of Ms death, December 30, 1920, four policies on the life of William James Grandin were in force. Two of them, viz., A-7373 for $20,000, and MDB 178 for $20,000, were issued on July 30, 1919. With those two policies we are not concerned, for, while issued subsequent to the Act of February 24, 1919 (40 Stat. 1057), they were by its terms exempt from taxation. But wo are concerned with the other two policies, viz., No. 81265 for $10,000, issued December 31, 1894, and No. 1514880 for $250,000, issued December 30, 1906. The $10,000 policy was on April 22, 1909, made payable to Harriet C. Grandin, the decedent’s wife, and she was made the beneficiary of'the $250,000 policy on February 24,1908, and so remained at the date of the death of the decedent. Against the protest of the estate of the decedent a transfer tax was assessed on these two policies and paid. An action was then brought to recover the same in the court below. That court held that, “under the ruling of Judge Thomson of this District in the case of Flick v. Lewellyn, 298 F. 803, we hold that these policies of insurance were not properly included within the estate of the decedent, subject to estate tax.” The decision of Judge Thomson was affirmed in Lewellyn v. Frick, 268 U. S. 238, 45 S. Ct. 487, 69 L. Ed. 034, on the ground that the act was inapplicable, because the policies antedated the passage of the taxing act. In the instant case it may be noted that two of the policies in question, aggregating $260,000 in amount, likewise antedate the act and therefore fall within the Supreme Court ruling.

It is, however, contended that the holding of the Supreme Court in 268 U. S. 238, 45 S. Ct. 487, 69 L. Ed. 934, that the Act of February 24, 1919 (40 Stat. 1057), did not apply to insurance policies taken out before that date, has been reversed by the reasoning of that court in Chase National Bank v. U. S., 278 U. S. 327, 49 S. Ct. 126, 73 L. Ed. 405, 63 A. L. R. 388, and Reinecke v. Trust Co., 278 U. S. 339, 49 S. Ct. 123, 73 L. Ed. 410, 66 A. L. R. 397. I cannot agree with this contention. In the Chase National Bank Case, the policies were taken out after the passage of the Act of February 24,1919, and consequently the question decided in the Frick Case, 268 U. S. 238, 45 S. Ct. 487, 69 L. Ed. 934, was not involved. The Reinecke Case did not involve insurance policies nor the statute passed on in the Frick Case.

In the absence of any statement by the Supreme Court itself that its holding in the Frick Case is no longer law, I feel I am justified in following its holding in that case, and-, as it did, “construing «the statute as referring only to transactions taking place after it. was passed.” Moreover, I cannot but feel that, since -the decision in Lewellyn v. Frick was made, many persons have based their acts on such holding by that court, and that, if it is no longer the law of the land, that, court will dispel the uncertainty now confronting insurers, and itself settle this vital question authoritatively.