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92 C. Cls.

Evidence. The main issue raised by the appeal of Mr. Goltra's executors relates to the evidence. In its opinion the Court of Claims said:

"It is contended by the plaintiff that, in arriving at just compensation, an offer to rent the fleet made years after the fleet had been seized and the rental value of similar vessels on the Mississippi River should be taken into consideration. These contentions cannot be sustained.” Assuming that these items of evidence were competent, we cannot say that the Court of Claims, making a jury award, was bound to give them weight. The actual damages suffered by Mr. Goltra were highly speculative, especially since the contract was subject to lawful cancellation whenever the Chief of Engineers rightly or wrongly but in good faith determined that Mr. Goltra was violating its provisions. Mr. Goltra's operation under the lease had been a losing venture. Under these circumstances, the Court of Claims may have believed that an offer to purchase, made in May 1925, was too remote to influence its judgment and that the rental value of other vessels on the Mississippi, not subject to the same restrictions as those taken by the Government, was too unreliable to afford a useful comparison. It was for the Court of Claims to decide what weight such facts deserved, and we construe its opinion only as holding that under the circumstances of this case the evidence was not considered to be of any assistance in reaching a conclusion.

Mr. Goltra's executors also complain of the failure of the Court of Claims to make certain findings, but there is no indication that the Court of Claims did not consider the facts which were embodied in the proposed findings.

The judgment in No. 191 is modified as indicated in the opinion and, as modified, affirmed; the judgment in No. 192 is affirmed.

The CHIEF JUSTICE and Mr. JUSTICE BLACK took no part in the consideration and decision of these appeals.

MANUFACTURERS TRUST COMPANY v. THE

UNITED STATES

(No. 43829]

(91 C. Cls. 406; 312 U. S. --]

Income tax on profits from purchases and sales of silver bullion; transactions taxable separately; legal fees not an allowable deduction,

92 0. Cls.

Decided April 1, 1940; petition dismissed. Plaintiff's motion for new trial overruled October 7, 1940.

Plaintiff's petition for writ of certiorari denied by the Supreme Court February 17, 1941.

THE CHOCTAW NATION v. THE UNITED STATES

(No. K-260]

(91 C. Cls. 320; 312 U. S. -)

Indian claims; tribal property and funds; treaty provisions.

Decided April 1, 1940. Petition dismissed. Plaintiff's and defendant's motions for new trial overruled October 7, 1940.

Plaintiff's petition for writ of certiorari denied by the Supreme Court, March 3, 1941.

H. B. NELSON CONSTRUCTION COMPANY v. THE

UNITED STATES

(Nos. 43574-A and 43574-B]

(91 C. Cls. 476 and 488; 312 U. S. ---]

Government contract; misrepresentation; delays; liquidated damages.

Decided June 3, 1940. Petitions dismissed. Plaintiff's motions for new trial overruled October 7, 1940.

Plaintiff's petitions for writs of certiorari denied by the Supreme Court, March 3, 1941.

Rehearing denied March 31, 1941.

ENOS L. SEEDS AND JOHN DERHAM, Jr., INDIVI

DUALLY AND TRADING AS SEEDS & DERHAM, v. THE UNITED STATES

(No. 44279]

(Ante, p. 97; 312 U. S. -]

Government contract; plaintiffs bound by accepted modification of contract; decision of contracting officer final.

Decided October 7, 1940. Judgment for plaintiffs.

Plaintiffs' petition for writ of certiorari denied by the Supreme Court, March 3, 1941.

92 C. Cis.

IRVING J. REUTER v. THE UNITED STATES

(No. 44588)

[Ante, p. 74; 312 U.S. -

Income tax; declaration of trust with grantor as trustee having broad powers of control.

Decided October 7, 1940. Petition dismissed.

Plaintiff's petition for writ of certiorari denied by the Supreme Court, March 3, 1941.

THE UNITED STATES, PETITIONER, V. ARTHUR

PELZER

(No. 43923. Decided March 4, 1940)

(90 C. Cls. 614; 91 C. Cls. 683; 312 U. S.-]

Certiorari to review a judgment of the Court of Claims holding that the plaintiff was entitled to recover gift taxes alleged to have been overpaid for the years 1932, 1933, 1934, and 1935; that the gifts set up by the plaintiff in the two trusts involved were of present interests in the property transferred, and that each beneficiary named in the respective trust instruments is a donee within the provisions of section 504 (b) of the gift taxing statute of 1932, for each of the gifts made in trust for the benefit of the eight named and living grandchildren, and for the year 1934 for each of the gifts made in trust for the benefit of the taxpayer's wife and three daughters.

The judgment of the Court was reversed in part March 3, 1941, the Supreme Court deciding:

1. The provision of the Federal gift tax law, section 504 (b) of the Revenue Act of 1932, permitting the deduction of the first $5,000 of a gift to "any person" during the calendar year, entitles a donor under a trust for several beneficiaries to the deduction of $5,000 for each beneficiary, not merely to a single deduction of $5,000; the term "any person" referring to each individual beneficiary rather than to the trust itself.

2. A gift in trust for grandchildren to accumulate the income for 10 years and then to pay an equal share to each grandchild who is living at that time and is 21 years of age, and to pay a like share to the other grandchildren when they

92 C. Cls.

reach the age of 21 years, constitutes a gift of "future interests” within the exception of such gifts in the provisions of the Federal gift tax law (section 504 (b) of the Revenue Act of 1932) permitting the deduction of the first $5,000 of a gift, as such exception is defined by the Treasury Regulations declaring that "future interests” shall include any interest or estate "whether vested or contingent, limited to commence in use, possession, or enjoyment at some future date or time."

3. Federal revenue laws are to be construed in the light of their general purpose to establish a Nation-wide scheme of taxation uniform in its application.

4. Federal Revenue laws are not to be construed as subject to State control or limitation unless the language or necessary implication of the particular law involved makes its application dependent on State law.

5. The question of what constitutes a gift of "future interests” within the exception of such gifts in the provision of the Federal gift tax law permitting the deduction of the first $5,000 of a gift is to be determined in the light of the general purpose of the provision, and is not governed by local definitions of “future interests" as found in the statutes and judicial decisions of the State where the gift is made.

The opinion of the Supreme Court was delivered by Mr. Justice Stone, as follows:

Decision in this case turns on the question whether certain gifts of property in trust for the benefit of several beneficiaries are gifts of "future interests” which, in the computation of the gift tax, are, by $ 504 (b) of the 1932 Revenue Act, 47 Stat. 169, 247, denied the benefit, otherwise allowed, of exclusion from the computation to the extent of the first $5,000 of each gift "made to any person by the donor" during the calendar year.

Sections 501 (a) and 502 (1) of the 1932 Act impose for each calendar year a tax upon the net amount of transfers "by any individual . . . of property by gift.” For the purpose of computing the tax § 504 (b) provides "In the case of gifts (other than of future interests in property) made to any person by the donor during the calendar year, the first $5,000 of such gifts . shall not ... be included in the total amount of gifts made during such year."

In 1932 the taxpayer, respondent here, created a trust for the benefit of his eight grandchildren and any other grandchildren who might afterward be born during the term of the trust. The trustee was directed to accumulate the income for a period of ten years and thereafter to pay an "equal grandchild's distributive share" of the income to each of the named grandchildren who were then living and twenty-one

92 C. Cls.

years of age and to pay a like share of income to each other named grandchild for life after that child should reach the age of twenty-one years. Provision was made whereby grandchildren born after the creation of the trust and during its life were to receive like participation in the income of the trust except as to distributions of income made prior to the birth of such after-born grandchildren, and except that the after-bom grandchildren should be paid their shares of the income during their respective minorities after the termination of the ten-year accumulation period. The trust instrument also made gifts over of the share of the income of each grandchild at death, the details of which are not now material. It was further provided that the trust should terminate twenty-one years after death of the last survivor of the named grandchildren, when the corpus of the trust, with accumulated income, was to be distributed in equal shares among the surviving grandchildren and the issue per stirpes of all deceased grandchildren.

During the years 1933, 1934, and 1935, the taxpayer added further amounts of property to the 1932 trust. In 1934 he also made gifts directly to his three granddaughters and created a trust to pay the income in equal shares to his wife and three daughers with gifts over of each share of the corpus of the trust upon the death of the life tenant.

Upon claims for refunds of overpaid taxes upon the transfers made in the years 1933, 1934, and 1935, the commissioner recomputed the tax and allowed one $5,000 exclusion only from the net amounts subject to gift tax given or added in each year to each trust. In the present suit, brought in the

.

, Court of Claims, respondent sought to recover overpaid taxes for the years in question on the grounds that the gifts to the beneficiaries were gifts of present not future interests and that the taxpayer in the computation of the tax for each year was entitled to one exclusion of $5,000 for each beneficiary. The court sustained both contentions and gave judgment for respondent accordingly. 31 Fed. Supp. 770. (91 C. Cls. 614.) We granted certiorari October 21, 1940, to resolve the conflict of the decision below with that of the Seventh Circuit in Ryerson v. United States, 114 F. (20) 150. (312 U. S. 260.)

The Government challenges both grounds of decision below. It argues that only a single $5,000 exclusion is allowable under $ 504 (b) from the total gifts made to the trust in each calendar year and that if the gifts are deemed to be made to the named beneficiaries of the trust no deduction can be allowed in the case of gifts to the 1932 trust because they were of future interests for which no exclusion is allowed by $ 504 (b).

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