William O. Douglas

“ Fahs insofar as it joined the gift tax and the estate tax of the Revenue Act of 1932, so as to infuse into the gift tax the explicitness of the estate tax in precluding the surrender of marital rights from being deemed to any extent a consideration 'in money or money's worth', we must hold that a settlement of property surrendering marital rights in anticipation of divorce is not made for 'an adequate and full consideration in money or money's worth'. ”

“ It is 'the transfer' of the property with which the gift tax statute is concerned, [7] not the sanctions which the law supplies to enforce transfers. If 'the transfer' of marital rights in property is effected by the parties, it is pursuant to a 'promise or agreement' in the meaning of the statute. If 'the transfer' is effected by court decree, no 'promise or agreement' of the parties is the operative fact. In no realistic sense is a court decree a 'promise or agreement' between the parties to a litigation. if finer, more legalistic lines are to be drawn, Congress must do it. ”

“ If enforceability under the decree is the criterion, a gift tax is due to the extent this indebtedness is reflected in the amount determined by the Commissioner to represent the value attributable to release of marital rights.↑ In none of the twelve jurisdictions in which decisions in point have been found has it been held that a suit could not be brought on the contract in a situation like that before us. ”

“ No reason is apparent why husband and wife should be under a heavier handicap absent a statute which brings all marital property settlements under the gift tax.
We are now advised that since submission of the case on October 16, 1950, petitioner has died, and that it will take some weeks before an administrator of her estate can be appointed. ”

“ On the broader ground apparently employed, no gift tax is due. But if the narrower basis be used, it is probable that some liability should be imposed. One of the transfers required by the agreement-the wife's assumption of a $47,650 indebtedness of her husband-was not incorporated into the divorce decree and therefore is presumably enforceable only under the contract. ”

“ It is of the essence of this agreement that the settlement herein provided for shall not become operative in any manner nor shall any of the Recitals or covenants herein become binding upon either party unless a decree of absolute divorce between the parties shall be entered in the pending Nevada action. The settlement herein provided shall become immediately effective and operative in the event of and upon the entry of a decree of divorce between said parties in said pending Nevada action. ”

“ Legislative history demonstrates that this amendment was intended not to change the law but to make clear that the requirement of consideration did not prevent 'deduction of liabilities imposed by law or arising out of torts.' H.R.Rep. No. ”