The opinion
Quealt, /., dissenting: Section 102(a) exempts from tax, property acquired by bequest. It cannot be disputed that under New York law the securities and cash which the majority would tax as income to the petitioner were acquired by the petitioner by bequest pursuant to the will of Marguerite K. Boyce. The Surrogate’s Court so held when the residuary legatee sought to compel the petitioner to qualify as a claimant against the estate.
The bequest was made in fulfillment of an agreement whereby petitioner was to render to the decedent such legal services as the decedent might require during her lifetime. It was, nevertheless, the voluntary act of the decedent. The petitioner’s right to the bequest was not conditioned upon his ever having performed any services for the decedent, and there is no evidence that the decedent ever required any services other than the periodic updating of her will.
In the classical will, bequests were made to persons who had served the testator “in consideration of long and faithful service.” The courts have never looked behind the will to determine the consideration for such a bequest. As the law has been interpreted for these many years, the term “bequest” in section 102(a) has not been restricted so as to exclude bequests made on account of some consideration flowing from the beneficiary to the decedent.
In United States v. Merriam, 263 U.S. 179 (1923), the Supreme Court held that a bequest need not be gratuitous in order to be exempt from income tax. See also Bank of New York v. Helvering, 132 F. 2d 733 (C.A.2, 1943).
Following the Merriam, decision, the courts have been called upon from time to time to decide whether an amount received in satisfaction of the breach of an agreement on the part of the decedent to make a bequest might nevertheless be treated in the same manner as if the bequest had been made by the decedent. Cotnam v. Commissioner, 263 F. 2d 119 (C.A. 6, 1959), affirming on this issue 28 T.C. 947 (1957); Joseph M. Mariani, 54 T.C. 135 (1970) ; John Davies, 23 T.C. 524 (1954); Mildred E. McDonald, 2 T.C. 840 (1943); Cole L. Blease, 16 B.T.A. 972 (1929); Cohen v. United States, 241 F. Supp. 740 (E.D. Mich. 1965). The question presented for decision in those cases was whether what was received by the claimant should be exempt from tax on the assumption that if the decedent had in fact bequeathed property to the claimant, as the decedent had agreed to do, it would have been exempt from tax. That question, in turn, depended upon whether the taxpayer took as a claimant against the estate or as a legatee. If there is no distinction, as the majority has held in this case, there would have been nothing to decide in the cited cases.
There is no precedent for the position of the majority of the Court. On the contrary, although section 102(a) or its counterpart has been a part of the tax laws from the inception of the income tax, the majority can point to no opinion in which a bequest was held to be taxable.
In this case, the Surrogate’s Court in an adversary proceeding decided that the petitioner was entitled to the stock and cash bequeathed to him by the decedent as legatee. In substance, the surrogate held that the decedent had provided in her will for an unconditional bequest of cash and stock to the petitioner, albeit such request may have been pursuant to a prior agreement between the decedent and the petitioner. However, since the bequest was unconditional, it was not incumbent upon the petitioner to prove his claim.
Once we accept the fact that the petitioner received the property by bequest, section 102(a) applies. It is not a matter of looking behind the bequest, in order to ascertain the testatrix’s motives, to prevent tax avoidance. As a practical matter, if we look to the corollary effect upon the tax liability of the Estate of Marguerite K. Boyce, also decided this day, the decision of the majority results in a loss of revenue. What is involved is whether, at this late date, the courts should look behind the will of a decedent to ascertain whether a specific bequest was supported by some consideration. Regardless of consideration, a bequest by will is a voluntary act, not subject to contract. I find no reason for disregarding the literal application of the statute exempting such bequests from tax.