ABSTRACT OF DECISIONS OF THE SUPREME COURT IN COURT OF CLAIMS CASES MILLIKEN ET AL., EXECUTORS, v. UNITED STATES [69 C. Cls. 231; 283 U. S. 15] Judgment was rendered in favor of the United States in the court below. Upon certiorari the judgment was affirmed, the Supreme Court deciding: 1. A finding by the Commissioner of Internal Revenue, in assessing an estate tax, that a gift made by the decedent in his lifetime was made in contemplation of death, is controlling when the tax is called in question, if not challenged by any fact appearing of record. 2. The revenue act of 1918, section 402, applies to gifts in contemplation of death made before its passage. 3. The inclusion of gifts made in contemplation of death in a single class with decedents' estates to secure equality of taxation, and prevent evasion of estate taxes, is a permissible classification of an appropriate subject of taxation. 4. A tax is not necessarily and certainly arbitrary because retroactively applied, but may be justified and upheld in such application because of the particular circumstances. 5. A gift in contemplation of death was made while the 1916 revenue act was in force; the donor died after the effective date of the act of 1918; in assessing his estate for transfer tax the value of the gift at the time of his death was included; and the tax on the whole was levied at the rates of the 1918 act, which were higher than those of the act of 1916. Held that the application of the later rates, as respects the gift, was not unreasonable or unconstitutional, in view of the relations of such gifts to transfers by death and the legislative policy of both acts concerning them, established before the gift was made. 730 Syllabus 6. The application of the higher rate of the 1918 act to gifts made in contemplation of death while the 1916 act was in force, does not destroy the character of the tax as one on privileges, and so render it unconstitutional as an unapportioned direct tax. Mr. JUSTICE STONE delivered the opinion of the Supreme Court March 2, 1931. UNITED STATES v. WELLS ET AL., EXECUTORS [69 C. Cls. 485; 283 U. S. 102] Judgment was rendered against the United States in the court below. Upon certiorari the judgment was affirmed, the Supreme Court deciding: 1. Whether a gift inter vivos was made "in contemplation of death” within the meaning of the revenue act of 1918, depends upon the donor's motive, to be determined in each case from the circumstances, including his bodily and mental condition. 2. A gift is made "in contemplation of death" when the motive inducing it is of the sort that leads to testamentary disposition, but not when the motive is merely to attain an object desirable to the donor in his life, as where the immediate and moving cause of transfers was the carrying out of a policy, long followed by the decedent in dealing with his children, of making liberal gifts to them during his lifetime. 3. A transfer may be "in contemplation of death" though not induced by a fear that death is near at hand. 4. Upon review of a judgment of the Court of Claims, the findings of fact are to be treated like the verdict of a jury and can not be added to or modified by reference to that court's opinion. 5. But absence of a finding of an ultimate fact does not require a reversal, if the circumstantial facts as found are such that the ultimate fact follows from them by necessary inference. So held where the opinion of the Court of Claims showed clearly the inference that it drew from its findings. Mr. CHIEF JUSTICE HUGHES delivered the opinion of the Supreme Court April 13, 1931. Syllabus FIRST NATIONAL BANK OF CHICAGO v. UNITED STATES [69 C. Cls. 312; 283 U. S. 142] Judgment was rendered in favor of the United States in the court below. Upon certiorari the judgment was affirmed, the Supreme Court deciding: 1. The Federal farm loan act (sections 16 and 13), in empowering joint stock land banks to invest their funds in the "purchase" of qualified first mortgages on farm lands, means that they may lend on such security. The loans so made are "securities issued under the provisions of" that act, within the meaning of section 213, Title II, of the revenue act of 1921, and the interest upon them is exempt from taxation under that title. 2. A national bank, in making a consolidated income and profits tax return for the year 1922, sought to deduct from gross income the interest paid on bonds of its affiliated joint stock land banks the principal of which was lent by the land banks on farm mortgages pursuant to the farm loan act. Held that the deduction was properly disallowed, since the mortgages are "obligations or securities . . . the interest upon which is wholly exempt from taxation under this title," within the meaning of section 234, Title II, of the revenue act of 1921, and by that section interest on indebtedness incurred or continued to purchase or carry tax-exempt obligations or securities is not deductible from gross income. Mr. JUSTICE MCREYNOLDS delivered the opinion of the Supreme Court April 13, 1931. KLEIN, FORMER ADMINISTRATRIX, ET AL. v. UNITED STATES [70 C. Cls. 151; 283 U. S. 231] Judgment was rendered in favor of the United States in the court below. Upon certiorari the judgment was affirmed, the Supreme Court deciding: 1. One of two habendum clauses in a deed conveyed a life estate, reserving the fee, and declaring that it should remain vested in the grantor if the grantee died before him; by the other the Syllabus grantee was to take the fee in the event that she survived the grantor, and in that case only. Held, a grant of a life estate and contingent remainder. 2. The estate transfer tax of revenue act of 1918, section 402 (c), is constitutionally applicable to a contingent remainder, become vested by the death of the grantor, which was granted by a deed executed before the effective date of that act but while the act of 1916, section 202, containing the same taxing provision, was in force. Mr. JUSTICE SUTHERLAND delivered the opinion of the Supreme Court April 13, 1931. BONWIT TELLER & CO. v. UNITED STATES [69 C. Cls. 638; 283 U. S. 258] Judgment was rendered in favor of the United States in the court below. Upon certiorari the judgment was reversed, the Supreme Court deciding: 1. Section 281 (e) of the revenue act of 1924, as amended March 3, 1925, provides that if a taxpayer has, on or before June 15, 1925, filed a waiver of his right to have the tax due for the taxable year 1919 determined and assessed within five years after the return was filed, then refund relating to such tax shall be made if claim therefor is filed on or before April 1926. Held that it should be construed liberally in favor of a taxpayer as to what amounts to a claim for refund. 2. Prior to the above amendment, the commissioner had finally, upon full information and consideration, determined that the taxpayer had overpaid its tax in a stated amount, and he had then withheld a refund solely because the taxpayer had not complied with section 281 as it then stood. Soon after the amendment, the commissioner notified the taxpayer that the overassessment could not be allowed unless the taxpayer filed a waiver on or before June 15, 1925, as the amendment required, and he enclosed blanks for that purpose. The taxpayer executed and returned the waiver before that date, with a letter to the commissioner saying that the waiver was sent to him in accordance with his request. Held that the commissioner was warranted in accepting the waiver and the letter transmitting it, with what went before, as amounting to the filing of a claim within the meaning of the amendment. Syllabus 3. A suit based upon a determination and certification by the Commissioner of Internal Revenue that the plaintiff is entitled to a tax refund, of specified amount, is not barred under R. S. section 3226 by the lapse of five years from the payment of the tax. Mr. JUSTICE BUTLER delivered the opinion of the Supreme Court April 13, 1931. UNITED STATES v. FELT & TARRANT MFG. CO. [69 C. Cls. 204; 283 U. S. 269] Judgment was rendered against the United States in the court below. Upon certiorari the judgment was reversed, the Supreme Court deciding: 1. Section 1318 of the revenue act of 1921, which makes the filing of a claim for refund a prerequisite to suit for recovery of an internal revenue tax, is not complied with by the filing of a paper which gives no notice of the amount or nature of the claim for which the suit is brought, and refers to no facts upon which it may be founded. 2. Likelihood that the claim, if filed, will be rejected, because of previous rulings of the Treasury on the question involved, does not dispense with the necessity of filing it. Mr. JUSTICE STONE delivered the opinion of the Supreme Court April 13, 1931. INDIAN MOTOCYCLE CO. v. UNITED STATES [283 U. S. 570] In response to a question certified by the court below in suit to recover money collected as a sales tax the Supreme Court decided: 1. A certificate from the Court of Claims presenting a question of law suitably distinct and definite, may be entertained although it be apparent that, with the facts as settled by an agreed statement accepted below, a decision of the question, either way, will be decisive of the case. 2. The tax laid by section 600 of the revenue act of 1924 upon certain specified articles, including motor cycles, "sold * by the manufacturer equivalent to 5% of the price for which they are so sold, the statute requiring the manufacturers to make return of their sales and to pay the tax, is an excise on |