The opinion
SternhageN, J., dissenting: Section 167 (a) (3) of the 1936 Act provides that where any part of the income of a trust is applied to the payment of premiums upon policies of insurance on the life of the grantor such part shall be included in computing the net income of the grantor. See Burnet v. Wells, 289 U. S. 670 . This is now interpreted in the Court’s opinion to apply only to a case where the part of the trust income so used is derived from property contributed by the insured. I think this is an unwarranted restriction which defeats the obvious intendment of the statute and provides a plain loophole. It is not necessary to deal with every possible case where several persons may create a common trust; this is a case where a husband and wife create the trust and require that the income from the property, which is contributed by the wife, shall be used to pay the premiums upon the husband’s insurance. In such case, I think the words the grantor may properly be interpreted collectively and in a proper case the words 'premiums and policies may be interpreted to include the singular. This is not a distortion of the language; it is but a proper exercise of the normal judicial function of filling the interstices to protect the obvious purpose of the legislation.
I am therefore of opinion that, in Dockets 418 and 112706, the amounts used by the trust to pay the premiums on Cartinhour’s insurance are included within his individual net income.
MuedocK, Kern, and OppeR, JJagree with this dissent.