dissenting: In my view the result reached by the majority is wrong.
In the first place, as I understand the facts here, the respondent added $24,286.96 to the gifts reported by the petitioner on the theory that such amount was the present value of the transfer made to the wife so far as it covered any period after her remarriage. In short, he seems to have used actuarial tables to determine the present value of the gift up to the time of the wife’s remarriage, leaving $24,286.96 ascribable to the period after remarriage. The transfer, during the period prior to remarriage, he recognized as being not a gift because of full and adequate consideration in money or money’s worth, under the husband’s duty to support the wife, within section 1002, Internal Revenue Code. The transfer after such remarriage he held to be gift because of the lack of such consideration. The use of tables to compute the probability of a wife’s remarriage has been recognized by us in Estate of Pompeo M. Maresi, 6 T. C. 583; affd., 156 Fed. (2d) 929; and by the Supreme Court of the United States in Brotherhood of Locomotive Firemen and Enginemen v. Pinkston, 293 U. S. 96. We may, therefore, properly ascribe the $24,286.96 to the period after remarriage ; and, in my view, there was no full and adequate consideration in money or its worth for the agreement to pay that amount and, therefore, it was properly determined to be gift. Though I do not say the divorce court could not award support and maintenance for a period after a wife’s remarriage (though there is authority to that effect), it is clear that a court will ordinarily at least set aside any such provision, in case of remarriage. 27 C. J. S. 994. The husband’s promise to pay after remarriage, therefore, is deemed to be without consideration, even in the ordinary sense, and certainly not to be based upon full and adequate consideration in money or its worth within the statute. Moreover, the majority opinion does not convince me that there was not donative intent in the ordinary sense so far as the husband agreed to pay the wife after remarriage. Nothing indicates that he was advised or under any impression that he would be required so to pay.
I further consider the majority view erroneous in that it appears to' be based upon the idea that, because the wife contended for a share in petitioner’s trust rights as well as rights to support, the agreement to pay her even after remarriage was not gift. It is well settled that the rights to support afford full and adequate consideration in money or its worth — and the transfer, to that extent, is not here questioned by the respondent— but a transfer of property by the husband in consideration of the release of any marital rights is within the estate tax law, section 812 (b) of the Internal Kevenue Code, not to be considered based to any extent on a consideration in money or money’s worth. The Supreme Court, in Merrill v. Fahs, 324 U. S. 308, and Commissioner v. Wemyss, 324 U. S. 303, laid down the rule that the estate tax and the gift tax are in pari materia and to be construed together; also that the law of gift tax is aimed to reach transfers which are drawn from the donor’s estate. Both of these cases, it is true, involved prenuptial transfers, but, in my opinion, there is no difference whatever between such transfers and those made between husband and wife, of property for relinquishment of marital rights, after marriage. The majority view here is essentially based on the idea that if a husband and wife are estranged they so deal at “arm’s length”; that there is full and adequate consideration in money or its worth within the statute. Though, romantically speaking, the parties in the Wemyss and Merrill v. Fahs cases might be thought not to have dealt at “arm’s length” during their courtship, in any real business sense the transfers in those cases were as much at arm’s length as in the instant case. In the Wemyss case the wife-to-be required her future husband to make a transfer to her to make up for income which she would lose from another source, marriage obviously being dependent on such an arrangement. In Merrill v. Fahs, supra, the husband-to-be made the transfer to his wife-to-be in order to secure from her a release of marital rights which otherwise she would have had after marriage. Can there be any question that these transfers were not actuated by the ordinary donative intent existing between sweethearts? Is there any possible difference between the consideration actuating the release of marital rights in Merrill v. Fahs before marriage and release of marital rights after marriage, in consideration of a property transfer just as in Merrill v. Fahs? In the two cited cases it is obvious, I think, that ordinary donative intent, such as is commonly evidenced in presents between sweethearts, was altogether absent and that cold business motives actuated the transfers, yet the Supreme Court said that within the intent of the gift tax law there were gifts, despite such lack of ordinary donative intent. In Commissioner v. Greene, 119 Fed. (2d) 383, it was held that donative intent was unnecessary to the gift tax, that state law (which means ordinary concepts of consideration) did not govern, and even that a state court decision did not control. The same court, in Gidnnini v. Commissioner, 148 Fed. (2d) 285, again stated that the “existence of legal consideration according to local law is immaterial under the tax laws involved herein” — the Federal gift tax. In my view, these cases are controlling and there was gift for that additional reason. Cases such as Commissioner v. Converse, 163 Fed. (2d) 131; Clarence B. Mitchell, 6 T. C. 159; Herbert Jones, 1 T. C. 1207, involving release of rights of support and maintenance, should not be followed, as here, to the extent of holding, contrary to the statutes as to both estate and gift tax and the above pronouncements of the Supreme Court, that transfers of property for release of marital rights rest on full and adequate consideration in money or money’s worth and are, therefore, not gifts. Other cases followed by the majority, founded thereon and to any extent involving property as well as support rights, are, in my view, not sound basis for the conclusion reached.
Moreover, the divorce decree here merely adopted the agreement of the parties and did not, as in Estate of Josephine S. Barnard, 9 T. C. 61, adjudicate the agreement to be “fair, just and equitable” and, in my opinion, is a consent judgment adding nothing to the force of the agreement previously made.. We said in Roland M. Hooker, 10 T. C. 388, in effect, that we disagree- with any idea that payment in liquidation of a judgment is necessarily a taxable gift within section 1002. The thought is obviously valid as against agreed judgment. Freuler v. Helvering, 291 U. S. 35. Believing that the mere idea of an “arm’s length” transaction between husband and wife, such as here involved, is fully covered by the Wemyss and Merrill v. Fahs cases and does not demonstrate the consideration required by section 1002, but, on the contrary, under section 812 (b) is not the requisite consideration, and that the judgment is not of the character which should be recognized as diminishing the donor’s estate, I respectfully dissent.
TuRnee /., agrees with this dissent.