dissenting: It may be that Congress never intended to impose the estate tax in a situation such as this. However, we do not agree with this opinion as it is written.
Bonds are recognized as giving a “situs” to a debt for estate tax purposes if physically present at some point outside the United States. Here, however, no bonds were in existence to evidence the debt at the date of death, and obviously the debt has no “situs” outside the United States. The United States can tax a debt as a part of the estate of a nonresident alien decedent where the debtor is a domestic corporation and there is no bond situated outside the United States to evidence the debt. .
Tempting as it may be to construe the statute as excluding the property herein from the reach of the estate tax law, such result cannot fairly be reached by treating the bonds as though they were in existence notwithstanding that they had actually been destroyed and as though their “situs” persisted in Great Britain. If the nonresident alien had bonds of a British corporation which had been physically present in the United States but which had been destroyed and not replaced prior to his death, it would seem strange to urge that such bonds had a continuing “situs” in the United States so as to subject them to estate taxes here. This example illustrates the conceptual difficulties created by the theory of the prevailing opinion.
Moreover, Regulations 105, section 81.50, provide that intangible personal property constitutes property within the United States if consisting of a property right issuing from or enforcible against a domestic corporation in cases where the written evidence of the property is not treated as being the property itself. Here such a situation exists since there is no written evidence which can be treated as being the property itself, and the intangible personal property consists of a right issuing from and enforcible against a domestic corporation.1 We do not see how the present result can be reached without getting around this regulation.
TURNER, J., agrees with this dissent.Moreover, that right is not a mere right to have new'bonds issued automatically to replace the old ones. Presumably, such bonds were negotiable, and since a holder in due course would obtain indefeasible rights against the maker, a debtor corporation obviously .would not replace allegedly destroyed bonds without adequate safeguards against being held accountable twice for the same debt.