dissenting: Although perhaps, on the ground, of failure of consideration, the ultimate conclusion of the majority opinion may be correct, the opinion is in large part based upon a concept to which I can not subscribe, that is, that section 503 of the Revenue Act of 1932 uses the word “consideration” as meaning consideration only to the donor, and may not be applied if the consideration consists only of detriment suffered by the donee. Neither in that section nor elsewhere in the revenue act do I find the word “consideration” defined. 1 conclude, therefore, we should apply that meaning which has developed through centuries of experience in the civil and common law. That meaning, beyond controversy, includes detriment suffered by the promisee. Corpus Juris Secundum on Contracts, p. 425. It is true that Commissioner v. Bristol, 121 Fed. 129, contains language to the effect that section 503 provides that the transferor must receive consideration. The statute, however, does not so provide, but requires only that property be “transferred for less than adequate and full consideration,” and if not, that the excess be deemed a gift. Property was transferred in this case for a consideration. Reasonable and realistic construction of the contract indicates clearly. I think, that the wife-to-be agreed to do two things, to wit, to marry petitioner and to forego her rights under a trust. The findings of fact recite that she told the petitioner that she would not marry him and lose her life income under the trust unless he would enter into a premarriage contract with her to make good her loss. In truth the making good of the loss appears the principal element of the written agreement entered into. It was upon the representation and understanding that marriage would entail such loss to his intended wife that the petitioner agreed to, and did, make the transfer: and if this representation had proved unfounded and she had in fact continued to receive, as before, the income under the trust, there would, in my opinion, have been partial failure of consideration for petitioner’s transfer. Of course, the fact that it may not have represented full and adequate consideration goes only to- the amount to be deemed gift. To the wife-to-be the detriment was consideration “in money or money’s worth.” The only point, then, is whether the consideration may be only to the promisee.
The Congressional Committee Reports covering section 503 of the Revenue Act of 1932. the same in both House and Senate, say that, “the tax is designed to reach all transfers to the extent that they are donative” and therefore that where the transfer is made for less than adequate and full consideration, the excess in value of property transferred over such consideration shall be deemed a gift. Patently, the object of the statute is to tax only so much of a transfer as is donative. This requires application of the usual concepts of gift and therefore of consideration. In my view, the language of section 510 of the same revenue act bears out this idea; for that section provides that the donee is personally liable for the gift tax. if not paid when due, to the extent of the value of the gift. The majority opinion, therefore, subjects the petitioner s wife to the entire gift tax upon something for which she gave a very real consideration, in money or money’s worth, to some apparently considerable degree; for though the majority opinion holds that in any event the value of her interest in the trust was not proven, and obviously it was not fully proven, nevertheless, clearly it appears that it had no small monetary value. An interest in a trust which had for the last six years produced about $5,000 per year can hardly be denominated without money’s worth. I find no reason, either in the words of the statute or in the requirement of the situation- sought to be covered by the statute, to desert the long respected concept of “consideration.” Why not take the law as we find it? The statute, m my opinion, fairly and reasonably requires the application thereof and negatives intent to tax that portion of a transfer which as between the parties is covered by consideration in its usual and ordinary legal sense.
In the above nothing is said as to whether an agreement to marry is a consideration measurable in money, for the reason that the agreement to marry was only one of the considerations entering into the contract, and therefore it appears immaterial as to whether marriage as consideration was pecuniarily measurable. The above conclusions, therefore, are based only upon the financial detriment suffered by the wife-to-be. as a consideration which in my opinion the law requires us to take into account. I therefore respectfully dissent.