United States v. Bess

PETITIONER: United States
RESPONDENT: Bess
LOCATION: First Unitarian Church of Los Angeles

DOCKET NO.: 395
DECIDED BY: Warren Court (1957-1958)
LOWER COURT: United States Court of Appeals for the Third Circuit

CITATION: 357 US 51 (1958)
ARGUED: Apr 07, 1958
DECIDED: Jun 09, 1958

Facts of the case

Question

Media for United States v. Bess

Audio Transcription for Oral Argument - April 07, 1958 in United States v. Bess

Earl Warren:

Number 395, United States of America versus Molly G. Bess, and Number 410, Molly G. Bess verus United States of America.

Mr. Davis.

John F . Davis:

Mr. Chief Justice, if the Court please.

In the previous references to this Court, to this case, the Court has been informed that the Court of Appeals held for the Government to the extent of saying that we had a right to follow the insurance payments to the extent of the cash surrender value in the hands of the -- that had been in the hands of the deceased.

It held against the Government however, by limiting the liability of the beneficiary to this cash surrender value and holding that the reminder of the insurance payments were received free and clear.

The Government petitioned from the portion of the judgment against it and Mrs. Bess petitioned from the portion of the judgment which held her liable to the extent of the cash surrender value.

Now, up to a certain point the facts in this case are the same as the facts in the Stern case.

The nature of the insurance policies is generally the same.

There were eight insurance policies involved in this case and as to one of them which was a group insurance policy, there was no cash surrender value, but as to the remaining seven there were substantial cash surrender values.

The premiums were paid by the deceased and in this case this is made specific in the stipulation.

The insured retained the right to change the beneficiary to assign the policies, the right to draw down cash surrender value or to borrow against it.

When the taxpayer died, his estate was insufficient to pay the amount of taxes which had accrued before his death.

There is one respect though that this case differs from the Stern case and that is that for two of the three years for which liability is involved, the assessment was made and notice and demand was given to the taxpayer before his death.

This is important because it resulted in the attachment of a lien to all of his property and rights and it is the contention of the Governments that this included a lien with respect to his life insurance.

But leaving aside for a moment the question of the existence of a lien, our position in this case is precisely the same as it was in the Stern case which has just been argued.

Is there any difference --

William J. Brennan, Jr.:

(Voice Overlap) how much of the total deficiency has been taken care of by the (Inaudible) taken two of the years?

John F . Davis:

Two of the years, I'll have to check the record and then I'll --

William J. Brennan, Jr.:

Well, we're there several years involved (Voice Overlap)?

John F . Davis:

There are three years involved.

William J. Brennan, Jr.:

So this is two of the three years.

John F . Davis:

That's right and --

William J. Brennan, Jr.:

Well, that's -- don't bother, don't waste your time.

John F . Davis:

It -- it's very clear from the -- from the record, there's no question, but it's -- well, I'll -- I'll leave it because there's no --

William J. Brennan, Jr.:

All right.

John F . Davis:

-- there's no problem about finding it.

Is there -- is there any difference as respect to the solvency question or insolvency question?

John F . Davis:

No.

The -- the situation is the same, so far as we know, the policies were taken -- when the policies were taken out.

They were solvent here as presumably in the Stern case and there was no evidence that it was insolvent at any time that any premium was paid.