dissenting: I disagree with the conclusion reached by the majority of the Board that the right to use the income of the trusts to pay the premiums is taxable to petitioner, where, as here, that right has not been exercised, but refused, and the premiums have been paid by others from a wholly different source.
It is conceded that no part of the trust income in this case was used in either of the taxable years to pay any life insurance premiums. The petitioner neither individually nor as trustee ever agreed to receive or to use any part of the trust income for that purpose. The premiums- in question were, in fact, paid by others from funds which were never received by and never belonged to the petitioner. To say that this was taxable income to petitioner seems as much a legal fiction as to tax him for compensation which he never received. The Supreme Court, in Burnet v. Wells, 289 U.S. 670, and in Du Pont v. Commissioner, 289 U.S. 685, wholly relied on for support of the main opinion, never held that section 219 (h) of the Revenue Acts of 1924 and 1926 was in accord with the Constitution when applied to a situation comparable to that presented in the instant case. Mr. Justice Cardozo, in the prevailing opinion in the Burnet v. Wells case, said:
Income of a trust lias been reckoned by the taxing officers of the Government as income to be attributed to the creator of the trust in so far as it has teen applied, to the maintenance of insurance on his life. Section 219 (h) of the Revenue Acts of 1924 and 1928 permits this to be done. The question is whether as applied to this case the acts are constitutional.
* # sfc $ ♦ *
* * * Upon an audit of the returns the Commissioner of Internal Revenue assessed a deficiency to the extent that the income of the trusts had been applied to the payment of premiums on the policies of insurance. There was .no attempt to charge against the taxpayer the whole income of the trusts, to *1047charge him with the excess applied to other uses than the preservation of the policies. The deft&ietnoir assessment was limited to that part of the income which had kept the policies alive. [Italics supplied.]
In the Du Pont v. Commissioner case, the same Justice, speaking for the Court, said:
The Commissioner of Internal Revenue, following the command of section 219 (h) of the applicable statutes * * * made a deficiency assessment by adding to the taxpayer’s income the amount expended by the trustee in the preservation of the policies.
It appears, therefore, that in each case relied on as authority for the main opinion only such part of the trust income as was expended in payment of premiums on the life policies of the settlors of the trusts was taxed to the settlors. In the instant case respondent has assessed a deficiency against petitioner on trust income not applied to the maintenance of insurance on petitioner’s life, and has not limited the deficiency assessed to that part of the trust income which has “ kept the policies alive,” contrary to what was done in the Wells and Du Pont cases. The assessment here is not based upon any constructive receipt of income by petitioner, but upon the power and opportunity, which he had declined to exercise, to receive it. As was said in Georgia Trust Co. v. Rose, 25 Fed. (2d) 997, “ To be income, it must ‘come in’; to be derived [the word used in the Sixteenth Amendment], it must be separated, taken ‘from the stream ’, as the two compounded Latin words signify.”
There is here no contention made but that where income derived from a trust may be — i.e., under the trust instrument — and is used for the benefit or advantage of the settlor in payment of premiums on his life insurance, as was done in the Wells and Du Pont cases, he should be taxed thereupon as for income to him under section 219 (h) of the act.
A statute may be valid as applied to one state of facts and invalid as applied to another. Milling Co. v. Bondurant, 257 U.S. 282, 289.
I am persuaded that when the permissive may be of the statute is interpreted, fictionally, to mean is, and some status under which income tax may be assessed is on that account declared to exist although it does not, in fact, exist, then either the interpretation of the meaning of the statute is wrong or the statute is in conflict with the fundamental law, and void. Cf. Hoeper v. Tax Commission. 284 U.S. 206; Heiner v. Donnam, 285 U.S. 312; Schlesinger v. Wisconsin, 270 U.S. 230; Bowers v. Kerbaugh-Empire Co., 271 U.S. 170,