Vanderbilt v. Eidman
Cornelius Vanderbilt died in the city of New York on September 12, 1899, leaving a will, which was admitted to probate, the seventeenth clause of which provides as follows:

'Seventeenth: All the rest, residue, and remainder of all the property and estate, real, personal, and mixed, of every description, and wheresoever situated, of which I may die seized or possessed, or to which I may be entitled at the time of my decease, including all lapsed legacies and the principal of any annuities which may terminate, and any part of my estate which may not have been effectually devised or bequeathed, or from any other source, I give, devise, and bequeath to my executors, hereinafter named, and the survivors and survivor of them, IN TURST, to hold said estate, and invest and reinvest the same, and to collect the rents, issues, income, and profits therefrom for the use of my son Alfred G., and to apply so much of said net income as may be in their judgment advisable, to his support, maintenance, and education, and for the care and maintenance of his property during his minority, and to accumulate any surplus income, such accumulations to be paid to him when he arrives at the age of twenty-one years, and thereafter to pay the net income of said estate to him as received until he arrives at the age of thirty years, when he shall be put in full possession of one half the portion of said estate to be set apart for that purpose by my executors and survivors of them. And upon further trust thereafter to pay to my said son, Alfred G., the income from the balance remaining of said estate until he shall arrive at the age of thirty-five years, when he shall be put in possession of the balance of said trust estate, and the said trustees shall be discharged from any and all liability and responsibility in respect thereof. If my son Alfred G. should die before attaining the age of thirty-five years, leaving issue, such portion of the estate as shall not then have come into his possession shall be divided by my executors into as many equal shares as he may leave children surviving, and one share shall be held by my executors to the use of each such child or children until he or she shall attain the age of twenty-one years, when it shall be paid to such child; but if he shall die without child or children, or if none of his children shall attain majority, then it is my will that my son Reginald C. shall in all respects, as to said residuary estate stand in the place and stead of his brother Alfred G., and that if Alfred G. shall die without issue before he attains the age of thirty years, then Reginald C. shall receive the income from said estate until he attains the age of thirty years, when he shall be put in possession of one half of the residuary estate, and thereafter Reginald C. shall receive the net income of the remaining one half of my estate, and on arriving at the age of thirty-five years he shall be put in possession of the whole of said estate, and my said executors shall hold said estate upon such trust, and I give and devise the same accordingly. If Alfred G. and Reginald C. shall both die before being put into possession of said estate, and without issue, I give whatever then remains of my residuary estate to my daughters Gertrude and Gladys Moore, share and share alike; and if either of my said daughters be then dead leaving issue, her issue to take his or her mother's share, per stirpes and not per capita; and in default of issue, the survivor shall take the principal.'

This clause contains the only provisions in the will relating to or in any manner affecting the disposition of the residuary estate of the testator, and determining the extent and character of the interests therein.

All of the children of Cornelius Vanderbilt, named in the seventeenth clause of his will, were living at the time this suit was brought. At the time of the death of Cornelius Vanderbilt his son Alfred G. Vanderbilt was between twenty-two and twenty-three years of age, and his son Reginald C. Vanderbilt was between nineteen and twenty years of age, and both were unmarried.

The appraised value of the residuary personal estate at the time of the testator's death was $18,972,117.46.

The right of Alfred G. Vanderbilt to the beneficial enjoyment, as provided in the will until he became thirty years of age, was appraised at $5,119,612.43, and upon this sum the executors paid a death duty under §§ 29 and 30 of the act of June 13, 1898 (30 Stat. at L. 464, chap. 448, U.S.C.omp. Stat. 1901, pp. 2307, 2308), at the rate of 2 1/4 per cent, the tax amounting to $115,191.28. After payment of this amount, and subsequently to the passage, on March 2, 1901 (31 Stat. at L. 946, chap. 806, U.S.C.omp. Stat. 1901, p. 2307), of an amendment to the war revenue act of 1898, the commissioner of internal revenue, considering that by that amendment Alfred G. Vanderbilt had become immediately liable for a tax on his right to succeed to the whole residue if he lived to the ages of thirty and thirty-five years respectively, assessed a death duty based upon that hypothesis. In making this assessment, as by the mortality tables it was shown that Alfred G. Vanderbilt had a life expectancy beyond the ages of thirty and thirty-five years, the commissioner assessed the interest as a vested estate equal in value to the sum of the entire residuary estate; viz., $18,972,117.46. Upon this valuation a tax was levied of 2 1/4 per cent, producin $426,872.64. On this amount, however, credit was allowed for the sum of the tax previously paid, leaving the balance due $311,681.36. On September 3, 1901, this balance was paid by the executors under protest, 'and upon compulsion of the collector's threat of distraint and sale.' The executors thereupon made the statutory application to the commissioner of internal revenue for the refunding of the amount, and, it being refused, commenced in the circuit court of the United States for the southern district of New York this action to recover the payment.

The facts, as above stated, were averred and the right to recover was based upon the ground that, as Alfred G. Vanderbilt only had the enjoyment presently of the revenues of the residuary estate up to the period when he might attain the age of thirty years, he was only liable to be assessed upon that beneficial interest. For this reason it was charged that the assessment made of the bequest to Alfred G. Vanderbilt of the whole residuary estate, upon condition that he reached the ages of thirty and thirty-five years respectively, was unwarranted.

The circuit court, on the ground that the complaint did not state a cause of action, sustained a demurrer to that effect filed by the government, and dismissed the action. 121 Fed. 590. The circuit court of appeals stated the facts as above recited, and certified certain questions.

Howard Taylor, Henry B. Anderson, and Chandler P. Anderson for Vanderbilt et al.

[Argument of Counsel from pages 484-487 intentionally omitted]

Assistant Attorney General Robb for Eidman.

Statement by Mr. Justice White:   Mr. Justice White, after making the foregoing statement, delivered the opinion of the court: 

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