
    MAUDE M. MONELL, EXECUTRIX OF THE LAST WILL AND TESTAMENT OF AMBROSE MONELL, DECEASED, v. THE UNITED STATES
    [No. H-282.
    Decided February 20, 1928]
    
      On the Proofs
    
    
      Federal estate-transfer taw; exemption; death from disease contracted m war service. — The facts reviewed, and upon the conclusion that testator died from disease contracted while serving in the military forces of- the United States during the late war (section 401, revenue act of 1918), recovery allowed of the Federal estate-transfer tax paid by his executrix.
    
      The Reporter's statement of the case:
    
      Mr. Arthur S. Barnes for the plaintiff.
    
      Mr. Dwight E. Rorer, with whom was Mr. Assistant Attorney General Herman J. Galloway, for the defendant.
    The court made special findings of fact, as follows:
    I. Ambrose Monell died testate on May 2, 1921, and at the time of his death was a citizen of the United States, and a resident of Tuxedo Park, Orange County, in the State of New York. Letters testamentary were issued to his wife, Maude M. Monell, on May 23,1921, by the Surrogate’s Court of Orange County, and she has since that time been, and now is, executrix of decedent’s estate.
    II. On the 30th day of June, 1922, the said Maude M. Monell, as executrix of the estate of Ambrose Monell, filed with the collector of internal revenue at Albany, N. Y., a return of said estate on Form 706, as revised to November, 1919, for the purposes of the Federal estate tax imposed by Title IY of the revenue act of 1918.
    III. Said return showed a gross estate in the estimated value or amount of $5,351,130.20, and a net estate of an estimated value of $4,870,130.60.
    IV. An amount, computed according to the percentages or rates for taxation as set forth in the revenue act of 1918, as Federal inheritance tax on said estate was indicated in the sum of $618,123.50.
    Y. Said amount of $618,123.50 on June 30, 1922, and at the time said return was filed for and on behalf of said estate, was paid to the collector of internal revenue at Albany, N. Y.
    VI. Subsequently the Commissioner of Internal Revenue assessed an additional amount of $56,396.54 as being due and owing from the said estate as and for a Federal inheritance or transfer tax, pid notified the estate of his determination to that effect, and thereafter said amount of $56,396.54, on the 27th day of June, 1924, was duly paid by said executrix, for and on behalf of said estate, to the collector of internal revenue at Albany, N. Y.
    VII. Subsequently the said executrix, for and on behalf of said estate and prior to the beginning of this action, filed with the Commissioner of Internal Revenue a claim for a refund of part of said amounts theretofore paid (as is set forth in Findings V and VI), said claim being predicated upon the fact that the tax as theretofore determined included, though illegally as a matter of law, as part of decedent’s gross taxable estate, two certain policies of life insurance, one in the amount of $200,000 and the other in the amount of $17,997, both of which amounts aggregating $217,997 had been used as a part basis, and included as part of the gross estate, upon which the tax levied and paid had been computed.
    VIII. The amount of the total tax aforesaid resulting from the fact that said sum of $217,997 had been included as part of decedent’s taxable estate was $40,021.46.
    
      IX. Such claim for refund was allowed by the Commissioner of Internal Revenue and said amount of $10,021.46, prior to the commencement of this proceeding, was paid to and received by plaintiff for and on behalf of said estate.
    X. The estate, subsequent to the filing of the claim referred to in Findings VII, VIII, and IX, filed another claim for refund based upon the allegation that certain of the property of- the estate as the basis for computing the tax had been accorded a valuation in an amount which was in excess of the true, taxable, or fair market value thereof as of May 2, 1921, the date upon which decedent died. *
    
    XI. The Commissioner of Internal Revenue subsequently adjusted the values of certain of such property, recomputed the tax upon such adjusted values, and determined that the tax levied and paid was on account of such overvaluation $109,899.68 in excess of the amount which should have been so levied and paid.
    XII. Subsequently to such determination as is set forth in Finding XI, plaint,iff was paid, for and on behalf of said estate, and received in refund said amount of $109,-899.68.
    XIII. Plaintiff, Maude M. Monell, executrix of the last will and testament of Ambrose Monell, deceased, for and on behalf of said estate, and within the period or limitation of time as fixed by statute and the regulations applicable thereto, fifed a clajm for the refund of the tax here involved.
    Plaintiff, after filing said claim and in support thereof, duly filed with the Commissioner of Internal Revenue the particular proof of exemption as is specified by the Regulation 37. The commissioner disallowed said claim on May 23, 1927.
    XIV. On October 8, 1917, decedent, Ambrose Monell, at that time 44 years of age, was commissioned in the military service of the United States as colonel, Signal Cox-ps, U. S. Army, and became one of the personnel of the military forces of the United States.
    XV. From the time decedent, Ambrose Monel), thus entered and became a part of the military forces of the United States, he continued to serve uninterruptedly in the military forces of the United States up to and including December 13,1918, upon which day he was honorably discharged therefrom at Hoboken, N. J., and upon his return from overseas.
    XVI. Prior to the time decedent, Ambrose Monell was discharged from the military service of the United States and subsequent to the time he entered such service, and during the time that he, decedent, Ambrose Monell, served in the military forces of the United States, he contracted, or became infected with, a brain .inflammation, a disease known to and described by the medical profession as encephalitis lethargica.
    XVII. Decedent on December 13, 1918, the day when he was honorably discharged from the military service of the United States, was diseased with the encephalitis, with which he had previously been infected.
    XVIII. Decedent Continued to be diseased with the encephalitis with which he became infected during the time he served in the military forces of the United States in the late war with Germany from the time he became so infected continuously and in unbroken continuity up to and including May 2, 1921, but in varying degrees of intensity, showing in October, 1918, symptoms of the existence of an acute condition; the disease next subsiding for a period of about 12 months up to the fall of 1919, due to the fact that decedent during that time rested and abstained from all activities tending to produce mental or physical strain; this period of subsidence being followed by symptoms of an active or acute encephalitis for approximately the succeeding nine months culminating in the development of an active maniacal state in July, 1920, together with a brain inflammation so .intense that subsequently up to the day decedent died there was no apparent subsidence of the encephalitis, but on the contrary a continuous progressive development of the disease, producing insanity early in September, 1920, at which time decedent, while insane, attempted to taire his life, and from that time on an evident continuous progressive development of said encephalitis to a worse condition or acute state up to and including May 2, 1921, culminating upon that day in insanity and decedent’s death.
    XIX. Decedent, Ambrose Monell, from the time he contracted said brain inflammation or encephalitis, continued to be diseased or infected therewith continuously, uninterruptedly, and in unbroken continuity, but in various stages or degrees of violence, up to and including May 2,1921, upon which day Ambrose Monell died from the said disease encephalitis, with which he became diseased during the time he served in the military forces of the United States.
    The court decided that plaintiff wa;s entitled to recover $524,598.90, with interest thereon at the rate of six per cent per annum from June 30,1922, to the date of judgment.
   Booth, Judge,

delivered the opinion of the court:

The plaintiff is the widow and executrix of the last will and testament of Ambrose Monell, deceased. Suit is brought by her to recover an alleged illegal exaction of an estate tax, a tax paid as per the rulings of the Commissioner of Internal Revenue, for the refund of which a proper exemption claim was filed and finally denied. .

Section 401 of the revenue act of 1918 (40 Stat. 1096-1097) enumerates the rates applicable to the determination of estate taxes and closes with the following provision:

“ The taxes imposed by this title or by Title II of the revenue act of 1916 (as amended by the act entitled ‘An act to provide increased revenue to defray the expenses of the increased appropriations for the Army and Navy and the extensions of fortifications, and for other purposes,’ approved March 3, 1917) or by Title IX of the revenue act of 1917 shall not apply to the transfer of the net estate of any decedent who has died or may die while serving in the military or naval forces of the United States in the present war or from injuries received or disease contracted while in such service, and any such tax collected upon such transfer shall be refunded to the executor.”

The exemption was continued in the revenue act of 1921.

Ambrose Monell was commissioned a colonel in the Signal Corps, U. S. Army, on October 8, 1917. Upon this date he was a young man 44 years of age, possessed of perfect physical health, vigorous mentally, and not only free from disease but a person of unusual accomplishments, both physically, and mentally. He was a man of wealth as well as family, and might have easily claimed exemption from military service during the war. He did not do so. He served uninterruptedly in the signal service abroad until honorably discharged on December IB, 1918. During the course of his strenuous service abroad Colonel Monell contracted the dreaded disease known to the profession as encephalitis lethargica, and was on and for many days prior to the receipt of his honorable discharge afflicted with this insidious infection, which not only impairs physical vigor but destroys the mental powers as well. Colonel Monell returned to his home soon after his discharge an invalid, broken both physically and mentally. He suffered continuously. ' Occasionally he manifested periods of improvement, and at one time, due to complete relaxation and freedom from intense physical or mental efforts, disclosed symptoms of substantial convalescence. However, what seemed to be improvement during this time resulted in the end to be only a period of accumulating the furious forces which finally manifested themselves in complete insanity and the patient’s self-destruction on May 2, 1921. As said in the case of Manhattan Life Ins. Co. v. Broughton, 109 U. S. 121, 131: “ Self-destruction by a fellow being bereft of reason can with no more propriety be ascribed to his own hand than to the deadly instrument that may have been used for the„purpose.” Conn. Life Ins. Co. v. Lathrop, 111 U. S. 612; Accident Ins. Co. v. Crandal, 120 U. S. 527; Conn. Life Ins. Co. v. Akens, 150 U. S. 468.

The record does not disclose the commissioner’s reasons for not refunding the tax herein claimed. The statute says it shall be refunded, and it is difficult to approach the case in any other view than the one which has been positively and completely made out, without contradiction in the remotest respect, the sequence of events beginning when Colonel Monell was commissioned, an excellent type of physical and mental vigor, a man especially sought for the particular division of the Army in which he was commissioned, rendering service without stint, and at times when sick and in distressing ill health, receiving his honorable discharge and returning home bereft of a sound body and a sound mind. This record, aside from the testimony of the doctors, would be sufficient to convince a layman that the disease which resulted fatally to the soldier had its inception, in the military service of his country and ultimately resulted in his death.

The case is wholly one of fact, and the indisputable record, complete in every respect, brings the plaintiff within the exempting statute and entitled to judgment beyond a doubt. In a case so obvious, with a record so overwhelming, it is indeed difficult to comprehend just why the plaintiff was put to the necessity of suing for the taxes involved. Congress extended to invalided soldiers of the late war many exemptions for and recognitions of the sacrifice they made. These statutes, along with the one involved in this suit, are remedial ones, designed for the soldier’s benefit, be he rich or poor, and when the facts bring the soldier within the express terms of the law as pointedly as in this case, the difficulty of administering the law totally disappears. We think the commissioner had before him undisputed facts, similar to the record herein, which clearly authorized the refund, and had it been made in accord with the mandate of the law over $175,000 of accumulated interest thereon would have been saved to the Government.

Judgment for the plaintiff for $524,598.90, with interest thereon at the rate of 6 per cent per annum until date of judgment. It is so ordered.

Moss, Judge; Graham, Judge; and Campbell, Chief Justice, concur.  