Harrison v. Northern Trust Co.
317 U.S. 476 (1943)

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U.S. Supreme Court

Harrison v. Northern Trust Co., 317 U.S. 476 (1943)

Harrison v. Northern Trust Co.

No. 103

Argued December 8, 1942

Decided January 11, 1943

317 U.S. 476

Syllabus

1. In § 303(a) of the Revenue Act of 1926 which, as amended by § 807 of the Revenue Act of 1932, provides that, where the federal estate tax is

"payable . . . out of the bequests, legacies, or devises otherwise deductible under this paragraph, then the amount deductible under this paragraph shall be the amount of such bequests, legacies, or devises reduced by the amount of such taxes,"

the words "payable out of" are used in the sense of "diminished or reduced by" the payment of the tax. P. 317 U. S. 479.

2. The legislative history of a statute may be considered in ascertaining its meaning, no matter how clear its words may appear on superficial examination. P. 317 U. S. 479.

3. Where a residuary estate is bequeathed to charities for which deduction is allowed by § 303(a) of the Revenue Act of 1926, as amended by § 807 of the Revenue Act of 1932, and, by the state law,

Page 317 U. S. 477

the federal estate tax is a charge not against the residue, but against the entire estate, the amount which, in computing the federal estate tax, may be deducted from the gross estate on account of the charities is the amount of the residuary estate actually passing to the charitable beneficiaries after provision is made for the payment of the tax. P. 317 U. S. 480.

4. The deduction here involved is one which Congress could have denied altogether, and the limitation placed upon it by § 807 is constitutional. P. 317 U. S. 480.

125 F.2d 893 reversed.

Certiorari, post, p. 612, to review the affirmance of a judgment for the present respondents in an action to recover an alleged overpayment of federal estate taxes.

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